SKY NEWS AM AGENDA
WEDNESDAY, 22 APRIL 2020
SUBJECTS: Support for Australian aviation industry during Covid-19; Virgin Australia administration; Appointment of Nicholas Moore as Government Liaison; Swissport.
ANNELISE NEILSEN, HOST: Joining us now is Shadow Infrastructure Minister Catherine King. Catherine King thank you for your time. This has been a huge day, or last 24 hours, for Virgin. We have seen them go into voluntary administration, the Treasurer has been at pains to say that doesn’t mean it’s over yet. We’re not looking at an Ansett situation yet. What more could the Federal Government do at this point?
CATHERINE KING, SHADOW MINISTER FOR INFRASTRUCTURE, TRANSPORT AND REGIONAL DEVELOPMENT: I think the Federal Government has conceded the point that Labor, the unions and Virgin have been making for some time now – that without government intervention, this airline is going to struggle to continue to be a strong competitor to Qantas and that it is going to need government intervention. Yesterday, we saw the Government appoint Nicholas Moore as the liaison between the administrator, Deloitte, and the Government. I think the Government needs to be very clear about what Mr. Moore’s role will be. But I think it is a complete concession that the Government is now making that they are going to have to do something if we’re going to be able to retain this airline as a strong competitor to Qantas.
Our view is that it was a devastating day for the 16,000 workers and their families. This is their life, many of them have come out of Ansett, it’s a big family of workers and to see some of the faces of workers yesterday, and you’ve got them on the screen at the moment, it is just absolutely devastating for them.
It didn’t have to come to this. Virgin, have been asking the Government for months for assistance, including as reported today, that they had got down to asking for $100 to $200 million just to try and get them through until the JobKeeper payments are starting to kick in, and the Government has constantly refused that assistance. So they’re now in voluntary administration, it’s pleasing to see there’s some interest in them, but what that’s going to mean is going to be really important going ahead.
We want to see this airline emerge as a strong competitor. We don’t want to see a loss of routes in regional Australia, and we definitely don’t want to see a loss of jobs, and we also don’t want to see the loss of the budget carrier, Tiger, because that’s been really important in being able to get people around to tourism destinations around the country and internationally as well.
NEILSEN: What the Treasurer has said is that this is a company that came into this pandemic with $5 billion debt, and is 90 percent foreign-owned by people who have very deep pockets themselves, like Richard Branson, like a couple of Chinese conglomerates that could stump up the money. Why should Australian taxpayers put up this money when there is a real risk that it could just be completely lost? And we’re talking about $1.4 billion, that’s a lot of money.
KING: But we’re talking about $200 million at the end of it, which is still a lot of money as well.
NEILSEN: Yeah, for another two weeks. $200 million would have kept it going for another two weeks.
KING: Yeah, look, this sort of hairy chest beating from the Treasurer is pretty typical of them. This is how they approach things, they approach things late after saying they’re not going to do anything. That’s what happened with the JobKeeper payment. Then eventually, things get really bad and they have to actually do something to intervene. I’m disappointed it has got to this with Virgin.
The Government’s been entirely hypocritical when it says that. It’s extended a lifeline, $100 million available to regional airlines, something we absolutely support. Now Rex is one of those airlines – that is 59 percent foreign-owned. The Government is not telling Rex that they’re not allowed to have access to any of this money. They’re not raising that this is owned, majority-owned, by foreign ownership. This is just an excuse the Government is making.
They know that what’s happening internationally is that, by necessity, governments around the world had to shut down people transiting through countries and within countries. That has had an extreme huge external shock on the aviation industry as well as all of the industries that rely on it, not just tourism… (inaudible)… retail at airports, airports themselves are all struggling. They know that’s the case. What other countries have done, including with countries like Singapore, Etihad Airlines for example is also part government-owned, what those governments have done is try and make sure that they retain those airlines and strongly bail them out. They can’t at the moment because of the collapse of aviation or in the business to try and bail out an Australian airline … (inaudible).
NEILSEN: What do you make of Swissport? Now this is a grounds operation company, they do a lot of things like the baggage handling like the support services at airports. Standing down 80 percent of its staff because of this. This isn’t a move that they would necessarily have to make sure they could retain them, but sorry, they aren’t standing them down, they’re sacking them. They could stand them down and then access JobKeeper, so surely that’s a decision that the company needs to be pressured on?
KING: Well, certainly, my preference and I’m sure the Government’s preference would be for people be stood down as we try and get through this process and use JobKeeper. This is exactly what Labor, the unions and Virgin have been warning of. The Australian aviation industry is extraordinarily interconnected. It is not surprising given there is so much uncertainty about Virgin which is a major player in the aviation industry. They are saying, look, we’re in trouble because of this downturn, we now can’t guarantee that we’re going to be able to trade our way out of this. And that’s what you’re starting to see. This will be the first of many.
And again, I think this has been an extraordinary lack of leadership on the part of Scott Morrison and the Treasurer. Waiting until things hit crisis point until they then say well we might be able to do something a bit later on. And, they’ve made that concession by appointing Nicholas Moore as liaison. That the Government has got an interest – finally – and that it might actually have to do something. But it shouldn’t have had to come to this and I think we’re going to see more of it unfortunately, in the aviation industry, and all of those associated industries that depend so much on their income source on our on airlines.
NEILSEN: Certainly, really just seismic change for the entire industry.
KING: Devastating. Thank you so much, Annelise, good to talk to you.
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