Qantas boss warns of ‘tough weeks and possibly months’ to come
Qantas boss Alan Joyce has praised the federal government's decision to waive more than $700 million in charges on the nation's airlines to ensure they can survive the coming months as the industry grinds to a halt during the coronavirus outbreak.
The federal government will refund and drop a range of charges on the industry including aviation fuel excise, the Airservices charges on domestic airline operations, and domestic and regional aviation security charges.
The world’s aviation industry has been plunged into crisis mode following the outbreak of the coronavirus.Credit:Louise Kennerley
Qantas announced on Tuesday it was slashing international capacity by 90 per cent from the end of March until at least the end of May, a steep increase on the 23 per cent capacity cuts announced last week.
Domestic capacity cuts will increase to 60 per cent over the same period, a major jump on the 5 per cent reduction last week.
Earlier on Tuesday, investors dumped Virgin Australia shares and bonds as aviation experts warned that many international airlines would be technically bankrupt by the end of May.
"There are some tough weeks and possibly months ahead, but our focus is on getting through that so we're ready to help with the recovery on the other side," Mr Joyce said.
Qantas chief executive Alan Joyce.Credit:Renee Nowytarger
The total cost of the government measures is estimated at $715 million, with an upfront estimated benefit of $159 million for reimbursement of applicable charges paid by domestic airlines since February 1.
Opposition transport spokeswoman Catherine King said the federal government's support package for the aviation industry was "a welcome first step" but it would be highly likely much more will be needed.
She said the government must ensure Australia had a vibrant aviation sector once the outbreak has passed and make sure it supported the 50,000 Australians who work in the industry.
"Over the past month our airlines have been transparent with the Australian public and their workforce about the challenges they face," she said.
"Ongoing increases in the federal government's travel restrictions, quarantine measures and social distancing rules have significant consequences for the viability of our aviation sector.
Federal Infrastructure and Transport Minister Michael McCormack said the measures were in response to the "unprecedented" and "likely sustained period" of falling international and domestic aviation demand.
"Our airlines run on tight budgets at the best of times and these past few weeks have been particularly tough," Mr McCormack said.
He said the federal government would continue to work with the aviation industry as it faced the ongoing challenges associated with COVID-19.
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