Australian government to underwrite costs of domestic flights
Published: Apr 17, 2020 02:54 PM

File Photo of Virgin airline: Xinhua

The Australian government announced on Friday a support package to guarantee that domestic flights continue amid the coronavirus crisis.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack, announced that the government will spend 165 million Australian dollars (105 million U.S. dollars) underwriting the cost of flights operated by Qantas and Virgin -- the nation's two biggest airlines.

The scheme will be reviewed after eight weeks, McCormack said.

"As Australians are asked to stay home unless absolutely necessary, we are ensuring secure and affordable access for passengers who need to travel, including our essential workers such as frontline medical personnel and defence personnel, as well as supporting the movement of essential freight such as critical medicine and personal protective equipment," he said in a press release on the government website.

"This investment will also help Australians returning from overseas, who find themselves in a different city after 14 days of mandatory quarantine, complete their journey home safely."

Virgin suspended all domestic flights earlier in April but said the support package would allow it to reinstate 200 staff.

It will operate return services from Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra.

"As a major Australian airline, we are proud to support the federal government in returning passengers home and enabling essential travelers to continue flying during this time," Virgin said in a statement.

Virgin Australia has asked the government for a 1.4 billion Australian dollar bailout, but Nine Entertainment newspapers reported on Friday that some private consortium has shown interest in buying the airline.

This report was welcomed by McCormack, who said the survival of the aviation industry was crucial.

"We want to see a market resolution for this and if Virgin can't raise the capital through its shareholders, and they've tried, then let's see what happens," he said.

"We need Virgin to be continuing to fly. We want two airlines at the end of this, and I think there can be a market solution for this."