Qantas aid raises questions on government support

When Virgin Australia teetered on the brink of collapse as Covid-19 grounded flights, Qantas Airways chief executive Alan Joyce warned against bailing out the airline. He said the government should not “pick winners and losers” by bailing out “badly managed” companies. Canberra subsequently rejected Virgin’s request for a A$1.4bn loan and within weeks Qantas’s main rival entered administration, a process that led to 4,000 job losses and a big reduction in capacity under new owner Bain Capital. Since then Qantas has adopted a more positive approach towards financial aid and snaffled up to A$2bn through taxpayer funded Covid-19 schemes. This has kept its planes flying during the pandemic. Unlike governments in France, Germany and New Zealand, Canberra has decided against taking an equity stake in its national carrier or attaching stringent conditions to bailout cash. Trade unions and Qantas rivals are now crying foul, with Rex, a regional airline, branding Canberra’s aviation support scheme a “Qantas package”. “Qantas is now so desperate that it is willing to risk universal ridicule just to get its hands on more cash at any cost,” said John Sharp, Rex deputy chair. Joyce hit back by comparing Rex with the ill-fated black knight in Monty Python and The Holy Grail, who lost his limbs fighting over a plank of wood. The dispute reflects Rex’s concerns that the so-called “flying kangaroo” is flooding regional routes with lossmaking flights to knock it out of the market — a claim it has made in a complaint to competition authorities. But it also raises questions about the conservative government’s handling of overall aviation support programmes worth in excess of $2.5b.<br/>