Aviation Industry

2 December 2020

Senator GRIFF My question is to Senator Cash, representing the Minister for Infrastructure, Transport and Regional Development. Minister, given that the government is underwriting key domestic routes through the Domestic Aviation Network Support, or DANS, program and that state borders are reopening, what discussions or agreement has the government had or reached with the major airlines about the prospect of returning flights to normal by Christmas?

Senator CASH (Minister for Employment, Skills, Small and Family Business and Deputy Leader of the Government in the Senate)

I thank Senator Griff for the question. Senator Griff, my understanding is—I've been advised—that the government is having, as you know, ongoing discussions with the nation's domestic airlines and has had throughout the COVID-19 pandemic, and we will continue to do that, because, as you know, the aviation sector has been severely impacted by COVID-19. Both domestic and international flights are down significantly, and, unfortunately, thousands of workers in the sector have been stood down. You'd also be aware, though, that we've provided around $2.7 billion so far to support the aviation sector. This includes support to maintain minimum air services across Australia, including over 400 return flights per week to more than 120 locations, of which more than 110 are regional or remote; $120 million is being paid to airlines to support critical connections on Australia's major routes; and over $30 million has been paid to airlines to ensure essential regional air networks can be maintained.

As you know, though, the reality is that international borders are still closed, and, as such, the Australian government wants domestic travel to get back to normal as soon as possible. The recent challenge we've faced, though, has obviously been in relation to states and territories at times having their borders closed, sometimes at very short notice. But, encouragingly, both Queensland and, indeed, my home state of Western Australia have recently announced the opening of their borders to Victoria and New South Wales. We are now seeing, as a direct response to that, increased or strong demand for flights returning already. But we will continue to talk with the aviation sector— (Time expired)

Senator GRIFF 

Minister, a number of my constituents and other constituents have experienced extraordinarily high fares in recent times. An example I can give is from yesterday, as to a flight to Adelaide. A number of flights were actually cancelled, in what appeared to be a move to maximise loadings and profits for another flight that ended up being four times the price of the original. What are you doing in relation to the price gouging that some airlines appear to be undertaking?

Senator CASH 

Certainly, the government's expectation is that our nation's airlines—as we expect for any business—abide by the nation's consumer laws and are treating their customers fairly. The airlines are contractually required to provide commercially competitive ticket pricing on subsidised flights. The government support seeks to maintain a level of competitive tension in the domestic aviation market—for example, by supporting both Qantas and Virgin on the same route. Under the Domestic Aviation Network Support program, government assistance reduces in direct proportion to the revenue airlines earn on supported flights, and, under the contracts, airlines provide weekly data in arrears at the time of invoicing to access commerciality triggers to enable the department to confirm if commerciality triggers actually apply.

Senator GRIFF 

A little bit of clarification on the minister's last statement: but does the DANS underwriting agreement of flights continue to apply if an airline operates additional profitable services on a DANS-specific route? And will you table the DANS agreements with Virgin and Qantas?

Senator CASH 

My understanding is that, in relation to the Domestic Aviation Network Support contracts, the contracts with airlines are actually commercially confidential and, as such, are not for publication. In relation to the first part of your question, Senator Griff, I would need to take that on notice and provide you with that information.

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