State-funded airlines gain in global market after Qantas, Virgin Australia halt international flights

Qantas and Virgin Australia have halted international commercial flights after government funding for select overseas routes ended, allowing some state-funded competitors to close in on the global market. The Australian government has subsidised Qantas and Virgin Australia flights from London, Auckland, Los Angeles and Hong Kong over the past few months, to repatriate Australians stranded by coronavirus. The flights were on a cost-recovery basis, with passenger revenue remitted to the government. Qantas and Virgin’s international fleets have otherwise been largely grounded since stringent border restrictions came into place on 25 March, banning Australians from leaving the country without an exemption. Qantas’s last scheduled flight from LA landed in Australia on Monday morning, while Virgin Australia’s landed in Brisbane on Tuesday. In their absence from the marketplace, state-owned airlines such as Qatar and the indirectly government-owned Singapore Airlines have continued to run regular international flights, even though they are likely operate at a loss, according to Prof Rico Merkert, a researcher in transport and supply chain management at the University of Sydney. “They want to grab market share, increase presence and improve branding,” he said. “Airlines spend an enormous amount of money in non-Covid times to maintain clients. What Qatar is trying to do is grab those passengers now and try and hook them. So for a carrier such as Qantas, that has to operate on a commercially viable basis, this is not a level playing field and it is very hard to compete.”<br/>