Govt to subsidise half-price Qantas, Virgin holiday flights

Ready for a long-overdue getaway? Book a flight and pack your bags to see more of Australia.

By David Flynn, March 11 2021
Govt to subsidise half-price Qantas, Virgin holiday flights

Tickets to over a dozen domestic holiday destinations will be slashed to half-price under a Federal Government subsidy designed to keep airlines flying and their staff employed, while at the same time assisting the struggling tourism industry and encouraging more Australians to 'holiday at home' this year.

An estimated 800,000 cut-price fares will be unlocked under the new Tourism Aviation ­Network Support scheme from April 1 to July 31, with Qantas and Virgin Australia the main recipients of this leisure travel largesse.

But capital cities are off the list, which instead favours a list of heavily tourism-dependent regions drawn up by the government with advice from the travel and tourism industry.

Nominated holiday hotspots include Merimbula, on the NSW south coast; regional Victoria; the Gold Coast, Cairns, the Mackay region (Proserpine and Hamilton Island), the Whitsundays and the Sunshine Coast; Kangaroo Island; Alice Springs and Uluru: Broome; and Launceston, Devonport and Burnie.

Airlines will be able to use the subsidy to slash the price of offering off-peak flights to those centres, but must have flown the route over the previous two years in order to qualify for the handout.

"Ticket to recovery"

The government says it is open to adding other holiday destinations within the overall cap of 800,000 tickets.

"This is our ticket to recovery – 800,000 half-price airfares to get Australians travelling and supporting tourism operators, businesses, travel agents and airlines who continue to do it tough through COVID-19, while our international borders remain closed," said Prime Minister Scott Morrison.

"This package will take more tourists to our hotels and cafes, taking tours and exploring our backyard. That means more jobs and investment for the tourism and aviation sectors as Australia heads towards winning our fight against COVID-19 and the ­restrictions that have hurt so many businesses."

Qantas Group CEO Alan Joyce welcomed the move as "fantastic news for aviation and for the thousands of businesses, big and small, that rely on the tourism industry" and flagged that the special sale fares would be available from Qantas and Jetstar from 1 April for travel from 1 May 2021.

For her part, Virgin Australia CEO Jayne Hrdlicka said the package would allow the rebooted airline to "accelerate our domestic expansion and also begin getting our international operations ready to open."

Ready for international flying

The $1.2bn stimulus package will also see Qantas and Virgin Australia receive monthly 'retention payments' through to the end of September to maintain aircraft and retain thousands of pilots, cabin crew and ground staff, especially those attached to international flying, who'll be needed for when overseas travel returns towards the end of this year.

“We have around 7,500 people in our international business who have already been out of work for a year and will unfortunately stay grounded until at least the end of October," Joyce said.

"The targeted support from the Federal Government is about helping people stay connected to aviation despite the extended of period of time they still face on the ground. It helps preserve the skills and experience we’re going to need when long haul flying restarts."

However, Joyce was also quick to call out that the government's money "will go directly to employees to help them meet their cost of living while they wait for international flying to return. It's not a subsidy for Qantas."

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Virgin Australia - Velocity Rewards

06 Aug 2017

Total posts 63

This is great news for the airlines, but my suspicion is that whatever money is saved on airfares will be lost on inflated accommodation prices...

50% of what fares ?

Recently Jetstar was doing MEL/BNE for $112 return (no checked bag). You won't be seeing 50% of those fares, just maybe more of them.

24 Aug 2011

Total posts 886

Airfares into domestic tourist winter hotspots like CNS and DRW are already sky-high.  This may help but it may just be a sugar-hit that doesn't address the underlying issues of regional places like the Whitsundays and Cairns.

Virgin Australia - Velocity Rewards

13 Jun 2018

Total posts 12

If the government really wants to see a pick up in domestic air travel they should get rid of the mask wearing mandate on domestic flights.

Wearing a face mask on a domestic flight in Australia which has had zero community COVID for a long time makes about as much sense as wearing a marine stinger suit in the council swimming pool.

14 Oct 2016

Total posts 94

I'm not 100% convinced a roll back of the mask mandate needs to be fast tracked. Yes I wear glasses and it is a bit of a pain to use masks but I consider the mask a small sacrifice to get back to some sort of normal. Maybe the first step could be loosening some of the areas where it has to be worn, like when you are seated in the plane and walking in the terminal. 

The most important thing I see to getting the travel sector back on track in the short term is to limit the hard border closures on domestic travel with at least the future provision that anyone who has been vaccinated should be exempt from any future hard border. If a state still wants these people to do quarantine, it should be at the states own cost and not that of the vaccinated person. 

05 May 2016

Total posts 616

If you take your time consuming food and drink you can minimise the time you need to wear a mask on board especially if you pick a seat that is one of the first to get served food and drink.

Yes, I would prefer not to have to wear a mask on board, but it is currently a requirement to wear one so if you want to travel you need to wear it. I think this will be one of the last restrictions to be taken off.

United Airlines - Mileage Plus

12 Sep 2011

Total posts 190

My recent flights on Qantas did not allow any form of social distancing, especially in Business Class ADL-SYD-ADL - Y seemed  much lighter load, and on return flight although C  had 5 seats free, I had an upgrader pick seat next to me so all otherpax in C  except myself and my seat mate in 1A  were partially distanced - so mask all go - just remember after 20 mins or so a Level 1 or 2 or even 3 mask becomes useless due to saturation my expired moisture 

Qantas - Qantas Frequent Flyer

26 May 2014

Total posts 454

So from Perth, the offering is Alice Springs, while from Hobart, nothing.   Given that residents of Perth and Hobart can’t get to the discounted destinations without travelling through a capital city, the scheme could have included through bookings.

15 Jan 2021

Total posts 8

WA ought to have been excluded completely, given that they have shut their borders to the rest of Australia. Holiday in your own backyard if you love it so much.  

Qantas - Qantas Frequent Flyer

26 May 2014

Total posts 454

Does the entire population of the state that you live in agree with all of the policies of your state government?

11 Sep 2018

Total posts 3

Apologies for having the strongest economy in Australia as a result.

Tall poppy syndrome much...

30 Jun 2020

Total posts 1

As a result of border closures?  Yeahhh.....don't think so bud

Singapore Airlines - KrisFlyer

02 Dec 2016

Total posts 43

I agree. McGowan makes Dan Andrews look competent.

I definitely won't be wasting my time and money on WA.

24 Aug 2011

Total posts 886

The Government has stated that any airline can participate as long as they have been flying the route for 2 years; REX must be very disappointed by this condition as it looks like the only route they have covered is Melbourne-Merimbula.

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 631

Not quite, @reeves35,

According to the ABC Australia News website - "The subsidy is open to any airline that has been flying the nominated routesin the past two years, meaning some regional operators will be eligible along with Qantas, Virgin and Jetstar." 

There is a subtle difference. There is no requirement for a carrier to have flown the route for the past 2 years, as you have stated. Rather, the route must have been flown within the past 2 years. 

Under your definition, VA would not qualify, since it was grounded for much of 2020. 

Rex will be able to reconsider restarting Kangaroo Island / Kingscote and it is qualified. Since the program begins on April 01, if Rex is able to start OOL on 31 March, it may well qualify. Grab your popcorn

30 Aug 2019

Total posts 15

I think it's fair to say REX has been sufficiently compensated by the government enough as it is..

07 May 2020

Total posts 97

I wonder if it will be the case of add it on and then take it off with the discount. So net result, the same!

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 631

Don't get me wrong - the Australian aviation sector needs all the help it can get ... but, is this the best way to handle it?

Ahh, an unabashed 'half-price' air fare subsidy. Hmm, Federal Government playing in the field of 'setting' / modifying / indirectly influencing the market and possible pricing of airfares? Strictly speaking, doesn't this constitute possible market manipulation? 

I wonder how the ACCC will react, if it all? When the shine wears off Scotty's 'inspired' announcement, I'm wondering how much angst this will create amongst the players? 

And who / what is monitoring all the thousands of airfare pricing buckets from each of the players over the next 6 months? Gee, I'll bet that far from being static, there will be a lot of dynamic pricing for Easter, ANZAC Day, Queens Birthday weekends etc and lots of other promotional and spur of the moment price variations. 

What happens to the smaller players such as Pelican and Alliance et al whose very existence is probably more at risk than the 'big' players?

24 Aug 2011

Total posts 886

The subsidy is for air tickets but the aim is not just to help the airlines but to reinvigorate the regions to which these extra tickets will take people.  This is not only accommodation venues but also includes all those businesses that rely on the tourist sector.  

Already it seems to have worked for some int'l airline workers with Jetstar which is looking to reactivate its 787s onto domestic routes meaning pilots, crew and maintenance staff who were looking at spending another year stood down are now going back to work.  Hopefully the incentive drives QF to do the same for its largely dormant A332 fleet and more of Virgin's 737 fleet are brought back sooner too.

You say the government is directly influencing the market and the answer is, of course it is; that is the whole point of any government incentive.  They want to drive a behaviour that would otherwise not happen.  

Is the scheme perfect?  No.  There seems to be some regions that appear left out and you'd reckon there is a fair chance the nominated route list will grow but equally the government has been smart enough to leave out regions that aren't currently struggling.  Darwin's winter bookings are looking brilliant so it is not included; likewise WA where residents who have basically been locked in for months with a booming mining based economy have supported regions such as Broome, Margaret River etc.

say again 50% off what fares ? Not the cheapest fare buckets, just maybe a few more of them. Seems like a good way to give airlines some money, but it should be on all airlines.

23 May 2012

Total posts 48

And it seems Canberrans don't need to travel anywhere for their winter holidays - there don't seem to be any 'subsidised' flights out of Canberra - I guess this was to be expected.

Moreover, the whole package does NOTHING for travel agents other than applying for a loan - who in his/her right mind would get a loan under the current circumstances when int'l borders (90% of any travel agent's business) are kept closed for a still unspecified period and any possible future profits are more than uncertain (apart from the fact that it is very unlikely that banks would approve a loan to a travel agency even if 80% of it was underwritten by the government given the current uncertainties).

A typical Morrison government announcement: all spin and nothing behind it.

05 May 2016

Total posts 616

Are there many flights direct from Canberra to these regional airports? It could be that you could still benefit from cheaper pricing flying e.g. via Sydney.

23 May 2012

Total posts 48

Yes, there are direct flights, e.g. CBR-CNS three times a week, CBR-OOL daily on QF and VA.

QFP

22 Jan 2013

Total posts 75

How do you know CBR has nothing? Can’t we travel thought Sydney, Melbourne ect to end up at CNS, ASP ect? Sorry must be missing something. 

23 May 2012

Total posts 48

I know from the ATAS memo I just received that only list airfares from MEL, SYD, BNE, DRW, ADL, PER but none from CBR.

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 631

According to the ABC Australia News page - article is titled "Cheap Flights with a Catch" :

OOL-CBR is nominated as a subsidised route, along with routes from ADL/MEL/SYD/AVV to the Gold Coast.

I'd be very surprised if the subsidy is only one-way, since the native population of the Gold Coast isn't that great. By comparison, each of the capital cities TO Gold Coast will really lift the economic activity in that particular area.

Qantas - Qantas Frequent Flyer

10 Apr 2016

Total posts 49

You think travel agents make money on selling domestic tickets when airlines have cut the commissions over recent years!  No, travel agents make money on packaging flights with hotels and tours.  So, they will be a huge beneficiary as lots of people walk into a travel agent to try and understand how they can take advantage of the Government subsidy but then walk out having bought far more than the ticket.

Rather than the industry complaining they should be entrepreneurial and thinking how they can ensure they benefit as much as possible.

The Arts community is also complaining but where have you seen them package a show with a hotel deal.  Hotels are complaining that they are running at 10% occupancy but hotels in Sydney are still north of $250.  Why not package a show for $250 and at least $150 net is better than an empty room

Qantas - Qantas Frequent Flyer

11 Oct 2014

Total posts 631

"Why not package a show for $250 and at least $150 net is better than an empty room"

Been a while since you last booked theatre tickets, eh Karl ? Hamilton is opening shortly in Sydney and the better seats are north of $200 each. Try booking any of the Australian Opera productions. Given the tiny number of live theatres left in Sydney, that doesn't leave much else. 

We're not Melbourne with a raft of preserved theatres, unfortunately.

The bigger question though, is who still uses Travel Agents? That battle was lost years ago.

11 Sep 2018

Total posts 3

If this doesn't scream Airline industry favouritism i don't know what would. Between Qantas asking for it's own version of the Jobkeeper effectively giving them free labour above and beyond anyone else (even other airliners) gets and this scheme the Australian government really needs a hard look at itself. People who travel generally have the money already if they're looking to travel. They've socialised Qantas' losses over Virgin now they're looking at going further.

The only thing stopping them is the ongoing possibility of the borders being shut on them while they're on holiday.

17 Jun 2020

Total posts 220

So the airlines will be given money for 50% off the median airfare. 

So in effect large businesses with significant balance sheets are being given money to put ordinary sale fares into market?

But then hardly anything given to small business operators or travel agents except low interest loans. 

Ridiculous.

Qantas - Qantas Frequent Flyer

04 Mar 2014

Total posts 182

Its a shame capital city pairs wernt included, CBD hotels, cafes etc and tourist attractions are really struggling

24 Aug 2011

Total posts 886

Yes, it would be good.  I assume the government may look at this but will put a trap into the offer like the old APEX fares where you had to be away on a Saturday night to avoid all the subsidy being consumed by business travellers who would travel anyway.

QFP

22 Jan 2013

Total posts 75

Is there significant information yet to determine if these fares need to be direct? Or if we have to, could we go thought a hub? Like Canberra -Adelaide- King Island. 

Qantas - Qantas Frequent Flyer

27 Nov 2017

Total posts 18

This is all terrific news BUT which fare class is the discount based on. I’m a little skeptical that the % might be taken from a published fare (or a flexible, high priced fare) and there will be no difference between this initiative and the prevailing best fares in the market.

Qantas - Qantas Frequent Flyer

10 Apr 2016

Total posts 49

I think Joyce said on the Today show yesterday that they would measure themselves against the flexible fare and report this back to the Government.  But the real test is really how many extra miles flown by the airlines.  Maybe this is how they should have been paid.  Put extra metal in the air and bumbs on seats and we will subsidy the extra passengers that you are able to generate to these locations

Qantas - Qantas Frequent Flyer

26 Nov 2012

Total posts 74

All the critics in here should remember this isn’t actually about subsiding airlines, it’s about getting people to holiday destinations decimated by the last 12 months.  When they arrive they will eat out, buy coffee, drink (a lot) possibly party, visit sights , pay for hotels and transfers and possibly hire cars and use taxis or Uber. Many will take tours and visit attractions.  Even the most cost conscious people will spend money  

I was in Cairns/Port Douglas over January.  It was absolutely shocking to a big city person, how many businesses were gone for good.  These areas have changed for ever and I feel so sad for these regions  

Any subsidy for this industry in those regions is good in my books.  Book a fare and spend some money and stop complaining. 

Qantas - Qantas Frequent Flyer

21 Jan 2014

Total posts 307

None of these areas can complain, the people of NTh Qld supported border closures which they new knew would decimate their own industries, all hoping the federal govt would continue jobkeeper or something similar, and they were wrong. I would suggest they look at the Qld Govt for money rather than asking the rest of the country for another handout, but the Qld Govt is broke and hasn’t got two cents to rub together, should have thought about that a bit earlier.

10 Aug 2020

Total posts 21

I wouldn't even take a flight in Australia if they give it to me for free... I would pay double fare for an international flight to get out of this country.. I won't be forced to spend a cent on forced holidays here in Australia by a group of dictators... when they open international border's maybe then I will spend a bit in Australia again.. I guess it's just my way of making a stance.. the old saying you can lead a horse to water but you can't make him drink... I am saving every cent and going to be an expat after this go live in a country with basic freedom and rights.. 

Looking forward to see what the do gooders have to say....  bye bye..

02 Dec 2016

Total posts 93

Tourer.  You can leave now.  There isn't any restrictions on leaving.

XWu
XWu

09 May 2020

Total posts 381

This is probably one way to link some sort of federal subsidy/handout to keeping borders open, without too much cost layout for the big volume  inter-capital travel route


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