2.1
Measures taken from March 2020 by state and territory governments and the Commonwealth which were designed to control the spread of COVID-19 had swift and devastating impacts on the aviation sector. To soften the impact on the sector and its workers, a number of supports and initiatives were put in place—with varying degrees of success.
2.2
This chapter provides an overview of the Australian Government response to the pandemic as it relates to the aviation sector. It begins with a timeline of key events in the COVID-19 response, before providing an overview of the major initiatives and support packages.
2.3
The chapter concludes by reiterating a key finding from the committee's interim report—that ongoing financial support to the aviation sector is critical if the Australian aviation sector and workforce are to be able to rebuild and meet demand in a post-pandemic world.
Government response to COVID-19
Table 2.1: Timeline of key events in the COVID-19 pandemic response
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20 March 2020
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International borders closed to non-citizens and non‑ residents.
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24 March 2020
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The Australian Government announced a ban on Australians travelling overseas.
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30 March 2020
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The Australian Government announced the introduction of the JobKeeper Payment.
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11 March 2021
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The Australian Government announced a $1.2 billion support package for aviation and tourism sectors.
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28 March 2021
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The JobKeeper Payment ended.
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18 April 2021
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Quarantine-free travel opened between Australia and New Zealand as part of the Safe Travel Zone.
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6 August 2021
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The National Cabinet agreed to the National Plan to transition Australia's National COVID-19 Response.
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1 November 2021
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Fully vaccinated Australian citizens and permanent residents could travel overseas without an exemption.
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5 November 2021
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80 per cent of Australians over 16 were now fully vaccinated.
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15 December 2021
20 December 2021
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Fully vaccinated eligible visa holders no longer needed an exemption to travel to and from Australia. This included international students with a valid visa.
The Australian Government released the Aviation Recovery Framework.
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7 February 2022
21 February 2022
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National Security Committee of Cabinet decided that Australia would reopen its borders to 'all remaining visa holders' on 21 February 2022. Travellers must be double-vaccinated.
As planned, Australian borders reopen to international flights for vaccinated travellers, 'as tourists returned and hundreds of people were reunited with family and friends'.
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Border closures, hotel quarantine and lockdowns
2.4
A number of measures were introduced to avoid or manage COVID-19 outbreaks in Australia, including: quarantine regimes, interstate and international border closures, limits on non-essential travel and 'stay at home' orders.
2.5
All states and territories imposed border restrictions to varying degrees to reduce the possibility of COVID-19 being transmitted across state borders. Changes to these interstate border restrictions have been numerous, and often accompanied by testing, quarantine and travel permit requirements, with penalties and fines for non-compliance.
2.6
In addition, international closures dramatically limited the operations of airlines and businesses throughout the air transport supply chain. From 20 March 2020, Australia closed its borders to non-citizens and non‑residents. A week later, the Prime Minister announced that a 14-day hotel quarantine system would house people returning to Australia.
2.7
Under the National Plan to transition Australia's National COVID-19 Response (National Plan), the state premiers and chief ministers agreed to reopen inward and outward international travel when 80 per cent of the adult population was fully vaccinated. At this point, the plan would include 'safe countries and proportionate quarantine and reduced requirements for fully vaccinated inbound travellers'.
2.8
Australia reached the vaccination threshold of 80 per cent in November 2021 and, in line with the National Plan, Australia's international border was gradually reopened, first to vaccinated travellers from New Zealand and later from Singapore. Despite delays due to the emergence of the Omicron variant, Australia reopened to international skilled and student cohorts, as well as humanitarian, working holiday maker and provisional family visa holders, and travellers from Japan and the Republic of Korea on 15 December 2021. Australia's international border reopened to remaining fully-vaccinated travellers on 21 February 2022.
2.9
The wide-ranging impacts of these measures on the aviation sector are discussed in Chapter 3.
Aviation support packages
2.10
The aviation sector has been the target of numerous government policies in response to the COVID-19 crisis. This includes a suite of loans, wage subsidies, grants and other initiatives across all levels of government. The following section provides an overview of the key support measures provided by the Australian Government.
2.11
On 17 March 2020, the Australian Government announced the Australian Airline Financial Relief Package; a package of measures for the Qantas Group (Qantas), Virgin Australia (Virgin) and regional airlines affected by COVID‑19‑related measures.
2.12
Then, on 28 March 2020, two new grant programs were announced as part of the Australian Government's $1 billion COVID-19 Relief and Recovery Fund: the Regional Airlines Funding Assistance program and the Regional Airline Networks Support (RANS) program.
2.13
The following month, the Australian Government announced the Domestic Aviation Network Support (DANS) program to subsidise the cost of operating a minimum domestic aviation network.
JobKeeper payment scheme
2.14
On 30 March 2020, the Australian Government established the JobKeeper Payment scheme (JobKeeper), which was a subsidy for businesses significantly affected by COVID-19. JobKeeper enabled businesses to retain their employees where COVID-related restrictions on movement reduced revenue.
2.15
According to the Hon Josh Frydenberg MP, Treasurer:
JobKeeper was an economic lifeline which helped keep around a million businesses in business and 3.8 million Australians in a job at the height of the pandemic. The RBA estimated that JobKeeper saved at least 700 000 jobs.
2.16
In the first phase of JobKeeper (30 March to 27 September 2020), eligible businesses and not-for-profits that could demonstrate a sufficient decline in revenue during the pandemic were able to receive $1500 (before tax) per fortnight per employee to cover the cost of wages. During the extension phase of JobKeeper (28 September 2020 to 28 March 2021), the payment was tapered and targeted to those businesses that continued to be significantly affected by the economic downturn.
2.17
JobKeeper concluded on 28 March 2021. However, an overwhelming majority of inquiry participants criticised the decision to end JobKeeper. This evidence was canvassed in the committee's interim report and is briefly discussed in Chapter 4.
$1.2 billion aviation and tourism support package
2.18
Replacing JobKeeper for the aviation sector, in March 2021 the Australian Government announced a $1.2 billion aviation and tourism support package. Measures in the support package included:
800 000 subsidised air fares to key tourist destinations under a Tourism Aviation Network Support (TANS) program;
International Aviation Support to help Australia's international passenger airlines maintain more than 8000 international aviation jobs;
support for regular passenger airports to meet their domestic security screening costs;
a new Aviation Services Assistance Support program to help
ground-handling companies meet the costs of mandatory training, certification and accreditation; and
the reinstatement of domestic aviation security screening cost rebates for more than 50 regular passenger airports.
2.19
In addition, the Australian Government extended the following programs to 30 September 2021:
the DANS and RANS programs (subsequently extended to 31 December 2021 and 31 March 2022, respectively);
the 50 per cent waiver of domestic air services charges for Regular Public Transport and aeromedical flights (subsequently extended to 31 January 2021); and
the International Freight Assistance Mechanism (subsequently extended to mid-2022).
2.20
This support is discussed in further detail in the following chapters.
Aviation Recovery Framework
2.21
The Australian Government released the Aviation Recovery Framework (the Framework) on 20 December 2021. The Framework outlines the Australian Government's response to COVID-19 and details how it intends to support recovery in the aviation sector. The Framework also sets out new policies to reposition aviation post-pandemic. The Hon Barnaby Joyce, Deputy Prime Minister, explained that:
The Framework builds on the assistance we have provided to date and will provide the policy and financial settings aviation operators need to recover strongly and grow on the other side of the pandemic.
2.22
The Framework contains six strategic priorities, as follows:
supporting aviation efficiency by targeting investment and reforming regulation;
building a sustainable pipeline of workforce skills for the future;
adopting and integrating emerging aviation technologies, including drones;
modernising airport infrastructure and regulation;
recognising General Aviation as a key component of the aviation ecosystem and identifying opportunities to refine its regulatory framework; and
better connecting regional communities by providing targeted support for access to essential aviation services and investing in regional aviation infrastructure.
2.23
The Framework was accompanied by $78 million in new funding comprised of:
a $30 million rebate program to support general and recreational aviation operators to install critical safety-boosting technology in their aircraft;
a further $4 million to extend the Women in the Aviation Industry Initiative;
a $32.6 million Emerging Aviation Technology Partnerships Program which will accelerate the development of new aviation technology, such as drones;
extending the Regional Airline Network Support program until 31 March 2022;
up to $29 million in grants under a third round of the Regional Airports Program to improve the safety and accessibility of airports or aerodromes in regional Australia; and
a further $15 million in grants to upgrade remote and very remote aerodromes across Australia under the Remote Airstrip Upgrade program.
Future of Australia's Aviation Sector Issues Paper
2.24
To inform the Framework, the Department of Infrastructure, Transport, Regional Development and Communications released the Future of Australia's Aviation Sector Issues Paper (the Issues Paper) in October 2020. The Department received 68 submissions in response, and held virtual consultations with over 70 organisations. A number of these submissions were also shared with the committee by submitters.
2.25
The Issues Paper explored Australian Government support for aviation during the COVID-19 crisis and canvassed a range of reform options, for implementation over five years, to strengthen aviation as COVID-19 restrictions are lifted. Many of the matters raised in the Issues Paper correspond with the inquiry's terms of reference and evidence provided by inquiry participants. This includes:
demand management at Sydney Airport;
airline access to domestic and international routes;
facilitating new and emerging technologies;
safe, secure and environmentally sustainable aviation;
local decision making at federally-leased airports;
local government owned aerodromes;
funding of regional airports;
aviation skills and workforce development; and
sustainable funding for Australian aviation services.
2.26
The committee welcomes the Australian Government's investigation of these issues through the Issues Paper and stakeholder consultation. This report represents an opportunity to revisit these issues to inform the Framework and its implementation.
The need for ongoing support
2.27
One theme that emerged when considering the impacts of the pandemic response on Australian aviation was that Australian Government assistance to the industry—originally designed as a series of short-term measures—would need to continue until it became clear that a meaningful and sustainable recovery was underway. A similar finding was made by the Future of Aviation Reference Panel, which was established to consult on the Future of Australia's Aviation Sector Issues Paper.
2.28
The committee heard that the DANS and RANS programs—initially intended to provide assistance to 28 March 2021—were two such measures. Ms Jayne Hrdlicka, Chief Executive Officer and Managing Director of Virgin, explained that these programs 'maintain vital infrastructure and connectivity and give us built-in safeguards that enable a supports roll-off as the demand normalises'; while Mr Andrew Parker, Group Executive, Government, Industry, International and Sustainability at Qantas, argued that 'the continuation of these models is critical' and 'the role they play is highly important'.
2.29
There was also strong support from industry for a continuation of the Australian Airline Financial Relief Package and the International Freight Assistance Mechanism.
2.30
The committee received overwhelming evidence of a need for ongoing support more broadly. Mr Scott Connolly, Assistant Secretary of the Australian Council of Trade Unions Inquiry, observed that it is 'self-evident that that uncertainty is guaranteed going forward … [so] the need for ongoing support is palpable'.
2.31
For Mr Daniel Gschwind, Chief Executive of the Queensland Tourism Industry Council, Australian Government support for airlines and the aviation industry had been crucial. When asked whether there was a need to continue such measures, he replied: 'Absolutely, yes'.
2.32
Evidence about the need for ongoing support to the aviation sector cuts across the suite of support measures. The committee considers evidence relating to the efficacy of specific measures in subsequent chapters.