Keeping the Air Fair – critical to post COVID-19 business, tourism and community
Posted on April 8th, 2020
With COVID-19 currently grounding 80% of the world’s aircraft, leaving two major Australian airlines with their wings clipped, Capricorn Enterprise is calling on Local, State and Federal political leaders to support both of the key local airline carriers who are headed toward technical insolvency.
As Qantas and Virgin Australia join many of the global carriers battling for their survival after suffering enormous losses following the unprecedented drop in domestic air travel, a strong warning must be issued of the dangers of a local landscape in which only one major operator survives.
The tourism industry welcomed the Federal government’s $715 Million assistance to the airline industry which included the waiving of taxes and charges.
In addition, the Federal government has committed to rescuing the collapse of Australian-owned airline, Qantas after the company boosted their liquidity with a $1.05 billion, ten-year loan at 2.75% interest rate against 7 of its wholly owned fleet of Boeing aircraft. However, it also remains critically vital that Virgin, (with its Australian headquarters in Brisbane) despite being a British-founded operator, is also reasonably supported.
Capricorn Enterprise chief executive Mary Carroll said, “when we get through this COVID crisis, it is critical that both Qantas and Virgin along with smaller contracted airlines such as Alliance survive to ensure we keep the air fair, particularly in regional Queensland.”
“We understand that the smaller airline companies like Alliance also need support during these difficult times, however, in Rockhampton’s case, Alliance is contracted by Virgin to provide their services to and from our local airport.”
“Many of us remember the days after the Ansett collapse in September 2001, when return airfares from Rocky to Brisbane prices were exorbitant.”
“I remember well when Virgin commenced their flights to Rocky in mid-December 2002, with Richard Branson himself touching down and announcing a launch special of $79 flights to Brisbane for the first three months of operation,” said Mary.
“Political, business and community leaders were there to cheer him on, so now, I think it’s only appropriate for all of us to lobby behind the push for the appropriate government support to keep Virgin afloat until we get to the other side of this crisis.”
In order to steer clear of reverting to the post-Ansett days of a Qantas monopoly with foreseen exponential prices hindering local travel, Capricorn Enterprise CEO, Mary Carroll is firmly urging government to support the airline that adds 11 billion dollars per year to the Australian economy.
In 2018-19, the Rockhampton airport serviced 552,623 passengers travelling for business, leisure and personal reasons.
“When this pandemic is over, more than ever we are going to need people to travel internally within their own borders and boost the local economic conditions promptly,” said Mary.
“Our nation is going to require domestic travel to be affordable and competitive and allowing one of our major airlines to fail will be detrimental as we will see flight prices rise rapidly due to the lack of competition.”
The health crisis that is crippling the economy has thrown the world into a tailspin and the vulnerability of airlines, who are heavily dependent on cash flow, now means that our government need to carefully consider all options and make some hard decisions that will have long term reprieve.
The struggles being faced by both Qantas and Virgin are unparalleled and in the best interests of the nation, all levels of government must be motioning their support in assisting both companies to weather the storm.
“Our nation relies on competition among airlines to promote affordability. Less competition among the industry means less need for cheaper prices and our biggest players need rivals to keep them honest and innovative,” said Mary.
“When Australia begins to recover from this predicament, although travel may initially be smaller or different, connectivity is going to be an important driver of the post-crisis recovery and every region in Australia is going to be vying for domestic visitors.”
“We will be counting on competitive and well-equipped airlines to support their domestic markets and keep prices low ensuring that people can easily travel internally to visit family, take a holiday and do business.”
As we face the insuperable challenge confronting the world, Capricorn Enterprise has commenced planning local recovery efforts which will largely focus on securing as much visitation to the destination as possible.