COVID-19: Australian Airlines not averse to a hand or both in the public purse
Alan Joyce the CEO of Qantas has always been a smart hand with the corporations money. Lets face it, no organisation pays the kinds of bonuses Qantas does to its CEO unless you’re good with money. Virgin Australia less so – did anyone call them ‘not for profit’? Rex, well, they worked out that they could double milk that rural cow a long time ago.
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Australian airlines are so keen to recover from this pandemic that they are taking two bites of the cherry; double-dipping; slashing at the silk purse twice; playing two-up with a double-headed coin; asking for ‘more’, and then ‘more’ again.
There is a great article in the AFR today that outlines how Qantas, and to a lesser extent REX and Virgin Australia, are getting as much money as they can from whatever source they are eligible for, so long as the Australian taxpayer is paying, and not their shareholders. I should say that given how much Virgin Australia shareholders are likely to lose after the companies voluntary administration, this government funding will be a mere trifle.
Arguably, the airlines are in fact triple dipping.
Aviation Support Package
This is government funding to maintain a minimum of flights in the regional, domestic and international networks. This allows for regional centres to have contact with capital cities, for emergency staff and others to travel between capital cities, and for international repatriation flights to return Australians caught overseas as countries closed their borders.
Preserving the minimum domestic aviation network is totally paid for by the government. Any fare or flight related income gets paid to government coffers, which reduces the cost to the taxpayer.
Aviation Sector Relief
The Australian Government is providing some fee and tax concessions to the Aviation sector. This is not inconsiderable at AU5 million. It is also providing some specific funding for regional providers, that comes in at nearly AU$300 million. Airlines also have some access to the COVID-19 Relief and Recovery Fund, which totals more than an AU$1 billion.
This scheme provides government payments of AU$1,500 per employee, per fortnight to a company, as long as those employees remain employed, and receive at least this amount from their employer.
How airlines are double dipping
The airlines, or more particularly, we know that Qantas is being paid for the operation of flights, including the costs of staff to operate those flights, and is also claiming the JobKeeper payment for those same employees, operating those flights. So that’s . . . paid twice for the same thing, isn’t it?
And, of course, all perfectly legal. They are not doing anything wrong, its just an artefact of COVID related government funding packages, with their main point being to get the money out there in the economy.
Nice work if you can get it eh?
Well, I did predict this would happen soon, and it looks like they left it until the beginning of 2023 to make the announcements.
While, I fully realise that the airlines are doing it particularly tough, without these massive subsidies during this pandemic period, especially Virgin Australia, which is in danger of folding. What I don’t like is most of this money is not going directly to people, but corporations.
All the airlines are going to end up with staff redundancies, people without any prospects in a vastly reduced airline industry. Of course this is unfair.
But, I can’t help feeling the injustice of this vast level of support for airlines, when arts workers, or foreign born Australian residents and students, usually in the lowest of paid work are receiving nothing.
And even more airline industry related, staff at dnata don’t get JobKeeper funding, just because their company go sold to a foreign entity.
It just seems like those with the biggest lobbying power win again.