Australia to aid ailing tourism with 800,000 half-price flights

[SYDNEY] Australia's government will subsidise 800,000 half-price air fares as part of a A$1.2 billion (S$1.24 billion) package to prop up the nation's ailing tourism industry.

To run from April 1 to July 31, the discounted fares are designed to help tourism-dependent regions and should support airlines, hotels and hospitality venues, Prime Minister Scott Morrison said in a statement. The package, to be formally announced on Thursday, also includes further support for the international aviation industry, and will expand a government-backed loan program to small and medium-sized businesses.

The subsidised tickets programme "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," Mr Morrison said.

Australia's domestic and international aviation industry has been badly damaged by the pandemic, even as the nation has managed to restrict the waves of infections that have roiled Europe and the US.

While the government has provided billions in direct economic stimulus to help keep the economy afloat, it sees the need to deliver additional support as programmes such as JobKeeper - which subsidises businesses to keep employees - wind down at the end of the month.

The economy powered into 2021, with gross domestic product jumping 3.1 per cent in the final three months of last year from the prior quarter. Yet, the support package is a shot in the arm to an aviation industry shattered by coronavirus-related travel restrictions.

Qantas Airways, which is cutting at least 8,500 jobs, lost about A$11 billion in revenue to the pandemic last year alone, more than half its normal annual sales. Smaller rival Virgin Australia Airlines is under new ownership after collapsing in 2020. Global air-travel isn't expected to fully recover until 2024.

BLOOMBERG