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Airlines given massive bail-out as Virgin cuts again


The Federal Government will pump $715 million into the aviation sector through a program of refunding and waiving of charges as the sector reels from the collapse of global tourism.

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A blanket “do not travel’’ warning has been made for all overseas travel leaving Virgin Australia little option but to scrap international flights from March 30 to June 14 and further restrict its domestic services.

Regional Airline Rex also said it would not last six months if the dire predictions of health experts were to occur while Westpac has warned the tourism sector could contract by as much as 80 per cent.

The Australian dollar also fell below the US60 cent level overnight and ASX followed with a fall of its own and was down about 200 points by mid-morning after a record rise yesterday.

Transport Minister Michael McCormack said the $715 million would include $159 million reimbursement of charges paid by the airlines since February 1.

“Our response today demonstrates our commitment to supporting the aviation sector as we put Australia in the best position possible to deal with the COVID-19 outbreak,” McCormack said.

“Our airlines run on tight budgets at the best of times and these past few weeks have been particularly tough. I’ve been speaking with Australian airline executives every day and will continue to work with them to make sure they receive the support they need.

As well as suspending international flights, Virgin said its group domestic capacity would be reduced by 50 per cent until June, with a temporary grounding of the equivalent of 53 aircraft.

In a statement, the airline said it would work closely with Government to prioritise bringing Australians home and returning visitors back to their point of origin safely, while maintaining its important role in supporting connectivity and the nation’s economy.

Virgin Australia managing director Paul Scurrah said the company had entered an unprecedented time in the global aviation industry and significant action was needed to responsibly manage our business while balancing traveller demands and supporting the wellbeing of Australians.

“We have responded by making tough decisions which include reducing our domestic capacity and phasing in the temporary suspension of international flying for a period of two and a half months.

“We are committed to supporting our guests during this period and have set up a dedicated customer care hub to manage the surge of customer queries and travel changes.

“We are also acutely aware of the important role airlines play in supporting connectivity, tourism and the nation’s economy, and are maintaining most of our domestic routes, and instead reducing frequencies in our schedule.

“The changes announced today will affect our people and we are having constructive discussions with team members and relevant unions.’’


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