News

15 Nov, 2021
Sydney Airport deal a milestone for industry super fund sector
The Australian

Qantas chief Alan Joyce is right in his call for Rod Sims’ ACCC to put some anti-monopoly conditions around any approval for the Sydney Aviation Alliance’s $24bn bid for Sydney Airport.

While the deal was agreed to this week by Sydney Airport’s board, Sims has an opportunity to lay out some terms for his sign off, to prevent any abuse of market power by airport owners.

While Qantas, as the major customer of Australian airports, has the most to lose, it is airline customers – the public – who will be hit if there were to be any use of market power to put up airport fees or exert other powers over customers

No one is saying that the range of institutional investors owning airports will overtly gang up to raise landing fees, but this week’s deal sees a further consolidation of airport ownership.

Sydney Airport stood out as the one major listed airport in the wake of a string of privatisations over previous decades.

This deal also represents another leap forward for the $900bn industry super fund movement which now has stakes in most of the major airports in one form or another.

The buyout for Australia’s busiest airport will go down as a milestone in the history of the increasingly powerful industry super fund sector, which is fast running out of big new deals in Australia.

Led by the $150bn IFM Investors, an investment fund owned by 23 industry funds, the alliance also includes Australia’s largest super fund, the $240bn AustralianSuper, and Queensland-based QSuper, which has assets of $117bn.

The funds linked up with Global Infrastructure Partners of the US to pull off the deal.

Another industry fund, the $100bn UniSuper, the biggest single shareholder in Sydney Airport with a stake of 15 per cent, will remain as a key shareholder in the

airport as its moves into private hands.

The ACCC notes IFM’s infrastructure investment fund has holdings in nine airports in Australia. These are Melbourne (25.2 per cent), Brisbane (20 per cent), Adelaide (12.8 per cent), Darwin (77.4 per cent), Perth (3.2 per cent), Alice Springs and Tennant Creek (77.4 per cent), Launceston (22.7 per cent) and Parafield in South Australia (12.8 per cent).

AustralianSuper has a 5.25 per cent stake in Perth Airport. QSuper has investments in airports in London’s Heathrow, Edinburgh and Brisbane.

UniSuper was not part of the bid but its decision to support the deal and not sell its stake was a critical element in its success. As well as its 15 per cent stake in Sydney Airport, it has a 6.98 per cent stake in Brisbane Airport and 49 per cent of Adelaide Airport.

In a letter to the alliance in October, the ACCC said it was looking at the “cross ownership between multiple airports and how this acquisition may impact on those dynamics.”

It was also looking at “competition in the provision of services for airlines, passengers and other users of airport services”.

Euromoney said the deal confirmed “the outsized power of Australia’s superannuation fund sector”. It noted that at $3.3 trillion, the sector was “one of the largest institutional asset pools in the world”.

“Its scale is out of step with the economy – double the national GDP, for example, and well over the $2.44 trillion entire market capitalisation of the ASX.”

More specifically, the deal is another sign of the firepower of industry funds, which overtook the retail super fund sector years ago, and their role in the investment landscape.

Not only is the influence of the industry funds rising – the latest statistics from APRA show there was $927bn in industry super funds at the end of June compared to $688bn in retail funds, but the assets in the industry fund sector are concentrated in fewer hands, 33 vs 93 in retail.

This makes the average size of an industry fund $28bn compared to $7.4bn for the average retail fund, which gives them more power.

But it also puts them under increasing pressure to find sizeable, stable, long-term assets to invest in, particularly in the limited market in Australia.

The Sydney Airport deal is was a long way from the controversy of 15 years ago when IFM’s then chief executive, Garry Weaven, made a contested bid for listed renewable energy company Pacific Hydro.

That bid attracted much attention with some observers aghast that an industry fund could be involved in a sharemarket buyout, predicting all sorts of fearful outcomes from “union controlled” capitalism.

What actually followed was a series of more private investments with super funds buying stakes in airports and other assets as they were privatised.

The next big deal came in 2016 when Canberra declared that a Chinese bidder and a Hong Kong company were unsuitable to buy a 50 per cent stake in NSW electricity company Ausgrid.

AustralianSuper and IFM jumped at the chance to pick up the stake in the asset for $16bn. The pair also teamed up to a buy a stake in NSW Ports.

While these were private deals with the funds buying assets from state governments, AustralianSuper has ventured into on-market takeovers in recent years.

In 2018 it launched a $4.1bn bid for hospital owner Healthscope as part of a consortium with Singapore’s GIC led by private equity group BGH Capital. That deal didn’t go ahead.

It teamed up later that year with BGH to bid for listed education company Navitas, a deal which was finalised in 2019.

Meanwhile, the industry funds continue to scour the globe for new big ticket infrastructure deals.

Further consolidation of super funds is well underway. APRA has been pushing for more consolidation of the industry for years, particularly at the bottom end.

Deanne Stewart, the CEO of the country’s second largest fund, the $150bn Aware Super – formed from a merger in 2020 of VicSuper and First State Super – predicted that the industry would eventually be dominated by half a dozen mega funds.

Aware Super itself has been a quiet owner of Bankstown Airport in Sydney’s west.

First State Super bought airports at Bankstown and Camden in 2015 for just over $200m.

After developing an industrial park around Bankstown Airport, Aware now estimates that it is worth around $1bn, although it has no intention to sell.

The Sydney Airport megadeal is a sign of the times of the increasing power of the industry funds.

Sims has to carefully consider how his competition powers need to come into play in a key infrastructure sector.

9 Nov, 2021
The US is ready to open up again to international travelers after almost 20 months. Here’s what you need to know.
Business Insider
  • The US is easing travel restrictions for most international travelers starting November 8.
  • The ban will allow air travel from previously restricted countries as long as the traveler has proof of COVID-19 vaccination and a negative test.
  • Retail and hospitality companies in the US hope the return of international travelers will create a boost for business.

The US is lifting COVID-19 travel restrictions for most foreign travelers starting Monday, a move that many retail and hospitality businesses hope will usher in a new wave of customers as the economy rebounds from the coronavirus pandemic.

Starting November 8, international visitors from 33 countries can again fly into the US as long as the traveler has proof of COVID-19 vaccination and a negative test.

Here’s what you need to know about incoming international travel in the coming months:

What international travelers will need to get into the country

 

The Biden Administration’s latest travel mandate will require visitors who are non-US citizens flying into the country to be fully vaccinated against COVID-19, which means they must have received their second vaccine dose two weeks prior to departure. Airline personnel will review proof of vaccine, which must a physical copy, a credible photo, or a digitized copy of a legitimate vaccination record.

Vaccines must be on the list approved by the Food and Drug Administration and those listed for use by the World Health Organization – including Pfizer/BioNTech, Moderna, Johnson & Johnson, AstraZeneca, Covishield, Sinopharm, and Sinovac.

The US will also continue to require proof of a negative COVID test within three days of traveling, either as a rapid antigen or a PCR test. Travelers will also be expected to provide their contact information like email, phone number, and address for contact tracing purposes.

 

There are several exceptions to general vaccine travel mandates

The US is exempting requirements for visitors from 50 countries with nationwide vaccine rates of less than 10%, including Egypt, Algeria, Iraq, Armenia, and Haiti, among others. These travelers will be generally expected to get vaccinated within 60 days of arriving in the US.

 

International travelers under the age of 18 in countries that have not yet authorized vaccines for children or have low vaccine availability will be exempt from vaccine requirement, but those over the age of two will need to provide proof of a negative COVID test within three days of departure.

Visitors who are not vaccinated due to medical reasons will need to provide a letter to the airline addressed from a medical professional.

Meanwhile, US citizens coming from abroad will not be required to present proof of vaccination, but if they choose not to, they must provide a negative COVID test within one day of traveling.

How incoming travelers will affect businesses ahead of the holiday season

The reopening is also expected to be a major boon for domestic industries, like airlines, hotels, and tourism, which have spent the past year-and-a-half struggling to recover from the impact of COVID-19 induced closures. Retailers are also optimistic that international travelers will also serve as a new wave of spenders as the holiday shopping season nears.

As international tourists visit, that will “give a jolt to the retail side,” National Retail Federation CEO Matt Shay told CNBC. “The return to the service and the experience economy is going to be positive and beneficial for retail and it’s going to be enhanced furthermore by these international visitors returning to the U.S.”

In cities like New York and San Francisco, international travelers will need to be aware that many businesses or indoor gatherings will require proof of vaccination.

9 Nov, 2021
Sydney Airport sale could be grounded over airline concerns
Sydney Morning Herald

Australia’s competition watchdog could ground plans by the country’s largest superannuation funds to buy the Sydney Airport, with airlines warning they will struggle to negotiate fair deals with commonly owned gateways.

Sydney Airport said on Monday morning it had agreed to a $32 billion takeover deal with a consortium led by the super funds-backed IFM Investors following four weeks of due diligence and negotiations, and urged shareholders to back one of the biggest M&A deals in Australian corporate history.

The final price of $8.75 in the signed Scheme Implementation Deed is unchanged from the offer in mid-September that convinced the company’s David Gonski-led board to open its books to the bidders.

The consortium consists of IFM - which is owned by 23 pension funds - AustralianSuper, QSuper and the New York-based investor Global Infrastructure Partners. UniSuper will transfer its existing 15 per cent holding in Sydney Airport to an equivalent interest when it comes off the ASX boards.

A shareholder meeting will be held in the first quarter of 2022 to vote on the takeover, which also needs European Union merger clearance and approval from the Australian Competition and Consumer Commission (ACCC).

The ACCC is running a review of the takeover and has sought submissions from airlines and other interested parties on the impact it may have on carriers and passengers, in particular due to the bidders’ existing ownership of Melbourne, Brisbane, Perth and Adelaide airports.

Graeme Samuel, a former ACCC boss who is now chairman of Airlines for Australia and New Zealand, said the lobby group for local airlines had submitted their concerns about shared ownership across major gateways.

“The increased common ownership that’s occurring at the moment... is leading to more coordinated behaviour by the airports in terms of their dealings with the airlines,” Professor Samuel said.

“That’s just making what is a series of individual monopolies [now] merging into one large monopoly around Australia. It’s making it incredibly difficult for airlines to be able to negotiate fair deals.”

Professor Samuel said the proposed takeover also made a “nonsense” of the Airports Act, which limits common ownership of Sydney Airport along with Melbourne, Brisbane or Perth Airport.

IFM owns 25 per cent of Melbourne Airport and 20 per cent of Brisbane Airport and will own more than 15 per cent of Sydney under the proposed takeover. But that will be split between two separately managed infrastructure funds, a move that IFM argues will mean it is not in violation of the Airports Act.

Australian Super owns 10 per cent of Perth Airport, and QSuper owns a stake in Brisbane Airport through the Queensland Investment Corporation, which controls 25 per cent. UniSuper owns 7 per cent of Brisbane Airport and 49 per cent of Adelaide Airport.

The ACCC declined to comment while its review was ongoing.

Mr Gonski said the airport’s directors believed the deal reached “appropriate long-term value for the airport, and unanimously recommend the proposal to security holders”.

IFM chief executive David Neal said the bidding consortium would “work hard to bring more flights and passengers back to the airport as the aviation industry emerges from COVID-19.”

Sydney Airport said the deal values its equity at about $23.6 billion, which is $1.3 billion more than the consortium’s first bid in July and $7.9 billion more than the company’s closing market cap before receiving the offer. Including debt that the bidders will take on, the deal is worth $32 billion.

Sydney Airport’s shares closed 2.8 per cent higher at $8.46.

RBC Markets analyst Owen Birrell said the offer price was appropriate value for shareholders, on a 12-month view, given the airport faced long and uncertain recovery ahead from the pandemic.

“While the aviation market reopening has now commenced... the profile of the recovery and the time it will take to return to pre-COVID levels remains highly uncertain,” he said.

15 Oct, 2021
New airline Bonza to launch in early 2022
Australian Financial Review

A US investment firm with over $US3 billion ($4.1 billion) in managed assets will bankroll the latest challenge to Australia’s aviation market, an independent low-cost carrier called Bonza that aims to take off early next year.

Founded by former Virgin Blue executive Tim Jordan, the new airline will fly Boeing 737-8 jets leased from linchpin investor 777 Partners, and forgo the lucrative “golden triangle” routes between Sydney, Brisbane and Melbourne for underserved leisure locations in hopes of stimulating new demand.

Mr Jordan said this was a more sustainable business model than taking on established players like Qantas, Virgin Australia and Regional Express on their home turf.

“Those markets are very competitive already. We are about doing something different,” he said. “In Kazakhstan, domestic aviation has grown 37 per cent in the first half of 2021 versus 2019. It is one of the fastest growing markets in the world because they are stimulating new demand that didn’t exist prior.”

It represents the second major challenge to the traditional airline duopoly since Virgin threatened to collapse at the start of the COVID-19 pandemic. Regional airline Rex’s launched domestic capital city flights earlier in 2021.

Mr Jordan, who has 30 years of industry experience as a consultant and an airline executive, would not say if he saw Rex as Bonza’s main rival given the former’s regional focus.

He instead said Bonza would not be a “me too” airline, and would keep costs down by omitting creature comforts favoured by business travellers such as a frequent flyer scheme or airport lounges.

Mr Jordan and 777 Partners targeted Australia as it is the only significant air travel market without an independent low-cost airline – Qantas owns Jetstar – and the pair have scheduled Bonza’s take-off for early 2022.

“A lot of today’s issues should be in the rearview mirror by then. It is a great time to start an airline; there is pent-up demand, and we can also leverage good opportunities in the aviation market like cheap jets,” Mr Jordan said.

777 Partners is an experienced aviation investor, having poured cash into Canadian low-cost carrier Flair and a regional airline alliance in the Asia-Pacific called Value Alliance.

777 managing partner Josh Wander said Australia was a “huge potential” in the Australian aviation market and backed Mr Jordan’s team for success.

“There is a huge opportunity to both do good and do well by democratising air travel through lower costs. We want to increase consumer choice and make travel more affordable and more accessible for all Australians,” Mr Wander said.

15 Oct, 2021
Health Minister Greg Hunt confirms international arrivals cap to be scrapped when Australia opens to travel
The Australian

Thousands of Australians could be home by Christmas, with international travel caps to be scrapped when borders reopen and a phase to home quarantine begins.

Federal Health Minister Greg Hunt confirmed on Monday morning that with the news NSW is planning to fast-track international travel as early as the end of this month, that would mean the end of caps for Australians trying to return home – provided their home is in NSW.

“The reason we’re so keen is not just to ensure people can travel overseas and reunite with their family and friends and loved ones but also to ensure people are able to come back,” Mr Hunt told Radio National.

“They have carried part of the burden (during the pandemic). I acknowledge that.

“That has kept us safe but now we can bring them home. We can remove the caps for those returning Australians if they can get home quarantine.

“We want to see everybody home as quickly as possible.”

Mr Hunt said Australia was “very used” to home quarantine.

“With people crossing state borders, people home quarantining because they are a close contact,” he said.

“That’s a system that’s well established and well tried.”

Mr Hunt’s comments come after Prime Minister Scott Morrison announced a plan on Sunday to fast-track reopening NSW’s international border following a discussion with NSW Premier Dominic Perrottet.

“I know the NSW government is looking at ways to fast-track home quarantine in November, and if that happens we will be able to move to facilitate the opening up of the international border into NSW sooner,” Mr Morrison said on Sunday.

“Now, that would mean home quarantine for vaccinated Australians wishing to return home via Sydney and giving the option for international travel for vaccinated Australians to leave and return.”

It is understood the state could open its borders and transition from hotel quarantine to home quarantine on November 1.

Other states could keep strict restrictions on their international borders – including on arrival caps and hotel quarantine – until they reach 80 per cent full vaccination coverage.

States like Queensland and Western Australia have hinted their international borders could remain closed for even longer.

While Australian citizens and permanent residents will be the only people able to access the scheme at first, it could ramp up to include skilled workers and international students from next year.

29 Sep, 2021
Travel stocks defy surging fuel price
Australian Financial Review

Brent crude at $US80 a barrel is yet to trouble the ASX’s travel stocks, which have soared to their highest levels since the COVID-19 pandemic began, as investor confidence rises that international borders could be open before the year is out.

While the broader market has struggled through September, travel stocks have risen sharply in the last four weeks, despite the price of oil rising and some states declaring they could keep borders closed until next year.

“We think there’s a significant amount of pent up demand in both leisure and corporate travel,” said 1851 Capital portfolio manager Martin Hickson. “As seen in other countries which have reopened their borders, there has been an immediate strong rebound in travel.”

On Monday, NSW Premier Gladys Berejiklian said international travel could be on the cards once 80 per cent of the state’s adult population is vaccinated, expected by mid-to-late October.

Qantas said it will resume more regular interstate travel in just over a month’s time, and it has begun to schedule flights overseas before Christmas.

The federal government’s national road map for exiting COVID-19 restrictions indicates there will be a “gradual reopening of inward and outward international travel with safe countries” once 80 per cent of Australians are sufficiently vaccinated.

The positive news for the travel sector has helped buoy share prices in Qantas, Flight Centre and Webjet to their highest level since COVID-19 struck.

“When Scott Morrison provided the road map, that gave us the confidence to build larger positions in the sector,” said Wilson Asset Management portfolio manager John Ayoub. “We’ve held smaller positions in some of these stocks since the start of the year but gained more confidence as we’ve seen the trends globally.”

The WAM Leaders fund has positions in Qantas, Flight Centre and Corporate Travel Management.

The transition may not be as smooth as the plans outlined by national cabinet suggest, and the sector needs to contend with rising fuel costs, after the price of Brent crude hit $US80 a barrel for the first time since October 2018 on Tuesday.

“The situation we find ourselves in is not too dissimilar from 2018 [when] there were concerns that OPEC+ was overtightening the market and so the group decided to aggressively ease cuts,” said ING head of commodities strategy, Warren Patterson.

“The group has been cautious up until this point. However, it is still to be seen if they will continue to take this approach if calls to increase output at a quicker pace get louder. The group will want to ensure that the market continues to draw inventories. This is particularly the case given that in 2022, the oil market is expected to be much more balanced.”

The rally in oil prices will mean airlines will need to fork out more for jet fuel and either need to absorb that cost or pass it on to consumers.

While Mr Ayoub said there could be delays in travel normalisation, it did not hinder the underlying opportunity and expectation for travel stocks to rally. “Negative news flow isn’t far away at any moment so you need to ensure you don’t get carried away with the realities of opening up,” he said.

“A lot of what we think might occur may just take a bit longer.”

 

21 Sep, 2021
Air NZ to work with Airbus on carbon-free hydrogen planes
The Sydney Morning Herald

Air New Zealand will work with Airbus to study the viability of flying hydrogen-powered aircraft on short domestic routes, as the airline aims to operate carbon-free flights by the end of this decade.

The Kiwi carrier said its two-year partnership with Airbus will research performance, operation and infrastructure requirements of the next-generation “zero-emission” hydrogen aircraft Airbus has in early development.

“We don’t have too many doubts that this is going to be the technology that’s going to operate in Air New Zealand for the regional ports we fly to,” Air NZ chief executive Greg Foran said in an interview.

“We’ve got some confidence that over the next few years we’re going to be able to come up with a solution [that] we think will work pretty well.”

Airbus, the European aerospace manufacturer which along with Boeing dominates the global commercial aircraft market, has put hydrogen at the centre of its efforts to prepare aviation for a low-carbon future.

The gas is produced by splitting water into hydrogen and oxygen, and when burnt in a combustion engine produces water vapor as its only byproduct, potentially eliminating the carbon planes spit into the atmosphere from petroleum-based jet fuel.

Airbus released three hydrogen aircraft concept designs in September last year. It said it would decide which design to put into production by 2025, ready for passenger services in 2035.

The designs are for two jet engine aircraft — including a futuristic “blended wing” concept — which could carry up to 200 passengers. The third design is for a smaller plane, carrying up to 100 passengers with wing-mounted propellers running on hydrogen fuel cells, which convert hydrogen and oxygen into electricity.

Mr Foran said Air NZ was interested in Airbus’ smallest design to replace its fleet of 51 turboprop aircraft, consisting of ATR 72s (which carry 68 passengers) and 23 Bombardier Q300s (50 passengers).

Air NZ is also looking at other battery powered electric aircraft in development and wants to have a low-carbon solution in place for short domestic and regional flights by 2030, Mr Foran said.

“With a bit of luck, in 10, 15 years time we might have something that gets across the Tasman [too],” he said.

The Airbus study will examine challenges including building new refuelling infrastructure at airports to carry liquid hydrogen, and whether suppliers can make enough “green” (produced using clean energy) hydrogen in New Zealand for its needs.

Aviation accounted for around 2 per cent of the world’s carbon emissions, before the COVID-19 pandemic grounded airlines globally, according to the International Civil Aviation Organisation. The United Nation’s aviation body estimates the industry’s emissions could triple by 2050 as flying becomes more accessible to the world’s growing middle class.

Air NZ, like Qantas, has committed to reaching “net” zero carbon emissions by 2050, meaning it will “offset” any emission it still produced by buying credits from CO2 abatement projects. The global airline industry has committed to cutting emissions to half 2005 levels by 2050.

However, Air NZ produces the bulk of its emissions from long-haul international flying. Mr Foran said switching to low-emission biofuel remained the only viable option to tackle those emissions, and that the airline was exploring the viability of producing “sustainable aviation fuel” locally with the New Zealand government.

Airbus Asia-Pacific president Anand Stanley said the agreement with Air New Zealand would give the manufacturer important insights into how to put a zero-emissions aircraft into service.

“The joint study will enable us to gain invaluable feedback on what airlines will expect and their preferences in terms of configuration and performance,” Mr Stanley said.

Airbus has entered a similar partnership with British airline easyJet and has undertaken a study on hybrid and alternative power source planes with Scandinavian Airlines.

21 Sep, 2021
Airlines fear late planning may force delay to travel
Australian Financial Review

International airlines are increasingly frustrated with the government’s attitude towards reopening the international border, anxious that plans have started too late and with too little consultation to enable a December travel restart.

Much of the worry this week is fixed on the announcement of a new digital passenger declaration system to verify if inbound travellers are inoculated against COVID-19 with an approved vaccine.

An industry source pointed out the government had tendered the contract to build the system last October, closed offers in December, and planned to declare a winner in March this year.

But the government chose Accenture only on September 13 – six months on from the initial plan – which gives the firm less than three months to get the system ready.

Airlines also do not know how the government will label travellers coming from places with different vaccine regimes to Australia, and potential limits on any such arrivals.

21 Sep, 2021
Qantas prepares for touchdown in $600m Mascot sale
Australian Financial Review

Qantas is eyeing a windfall of $600 million or more from the sale of its land holdings at Mascot in Sydney, well above initial expectations, after some of the country’s biggest industrial landlords pitched in on a second round of bidding.

Leading the charge were offers from local platform Logos, industrial powerhouse Goodman, ESR Australia and diversified player Stockland, which is now headed by Tarun Gupta and has been steadily stepping up its industrial exposure.

With the second round closing on Friday afternoon, as many as eight parties were invited to put up their best offers. Local platform Fife Capital has also shown interest in the process as well as Aliro Group, which is led by David Southon. 

Also in the mix, according to senior sources, is Sydney Airport itself, which has been casting its eye over Qantas’ holdings, which stretch across almost 14 hectares in South Sydney, even as the ASX-listed airport operator comes to grips with a near $33 billion takeover led by IFM Investors. 

Adding another twist to the bidding, Logos has teamed up with AustralianSuper for its offer, after the pair joined forces in July as part of a club of institutional investors that acquired Qube’s intermodal logistics facility at Moorebank in south-western Sydney for $1.67 billion.

Logos is majority-controlled by Singaporean fund manager ARA Asset Management which is itself being taken over by ESR, a Hong Kong-based player. ESR’s Australian’s arm is headed by Phil Pearce, a former Goodman executive, who led ESR’s $3.8 billion acquisition of the Milestone logistics portfolio in April, the biggest ever direct property transaction in Australia.

First-round bids on the Qantas portfolio exceeded initial hopes of $500 million, with at least one bid thought to be well above $600 million.

On offer is a series of land parcels that Qantas has progressively accumulated since the 1960s. The property is being put up as a portfolio sale, or can be broken down into individual sites, with the real estate being sold as freehold or on a 99-year lease.

Qantas put the Mascot portfolio on the market, appointing Colliers to broker it, after a property review which confirmed the national carrier’s headquarters will remain in Sydney. The process also identified surplus land holdings and property revenue-generating strategies for Qantas, which has absorbed heavy losses through the disruption of COVID-19. 

The portfolio includes the sale and leaseback of the Qantas Mascot distribution centre, which is on 39,000sq m and is expected to fetch at least $165 million on a 10-year lease with options.

Even more appealing for aspirant buyers are the portfolio’s several development sites which are on shorter lease terms. The boom in South Sydney’s industrial market has made it fertile ground for a new generation of multi-storey logistics facilities. 

 

 

21 Sep, 2021
$183m in government funding to extend aviation support until March
The Sydney Morning Herald

Qantas and Virgin have said they hope international travel will resume by the end of the year, a development Deputy Prime Minister Barnaby Joyce said was getting closer as vaccination rates rise.

The money will cover an extension of the government’s $750 weekly payments to cabin crew and pilots of international airlines, primarily Qantas, that largely cannot fly. It was set to end in October but will now run until March.

It is intended to ensure the industry doesn’t lose its capacity to operate before borders reopen. Airports in 11 cities will also get a share of $64 million to pay for the costs of screening passengers and baggage, which is a constant cost regardless of how many planes land and passengers go through screening.

Mr Joyce said aviation was essential to ensuring the economy could recover.

“As a driver of so many sectors of our economy, it is essential that the industry is ready to ramp up operations when international restrictions are eased,” said Mr Joyce, who is also Aviation Minister.

“It’s also important that the sector continues operating now, to maintain the flow of exports and imports and bring Australians home from overseas.”

The airports that will get the money are in Sydney, Melbourne, Brisbane, Perth and seven other cities. Qantas has previously said it plans to restart international flying beyond the New Zealand travel bubble by December 20 this year. Virgin Australia has also called for international flying to resume by Christmas.

Monday’s announcement takes the total amount of federal support for the industry to $5.1 billion through an array of programs since the pandemic began, but ground services companies that fuel, load, move and clean planes have been furious that they have been left out.

The sector has warned flights could be cancelled when travel resumes because, its industry body argues, it may not have enough staff to get planes in the air and passengers on board. The sector’s staff are eligible for $750 weekly coronavirus support payments in the same way as other workers, however.

“Hundreds of airline flights will be grounded this summer because thousands of critical aviation ground operations workers are leaving the industry,” an industry spokeswoman, Ann Maree Jackson, told a senate inquiry earlier this month.

A spokesman for Mr Joyce said the government was continuing to listen to industry and others and reviewing its pandemic response measures. He said having airlines ready to resume flying would have flow on effects for industries including aviation ground handling.

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