Airports ponder when coronavirus aid will land

The government’s commitment of up to $165m on subsidised flights has left airports wondering when they will get a handout.

A near empty Adelaide Airport Picture: AAP

The federal government’s commitment of up to $165m on subsidised domestic flights by Qantas and Virgin Australia has left airports wondering when they will get a handout.

The subsidies mean Qantas and Virgin can operate more than 200 flights a week for eight weeks, no matter how few passengers buy a seat on the services.

Although airports have welcomed the move, for some it will mean reopening terminals for just a few hours a day to operate the flights, for little or no financial benefit.

The first flights took off on Friday, with only a handful of passengers, hours after the services were announced by Deputy Prime Minister Michael McCormack on Thursday night.

Australian Airports Association acting chief executive Simon Bourke said even with the additional subsidised services, flight schedules were not sustainable for many airports, airlines or the many retailers and suppliers that operated at airports.

“While we remain committed to keeping our essential infrastructure open, this is coming at a significant cost,” Mr Bourke said.

Brisbane Airport Corporation CEO Gert-Jan de Graaff echoed his concerns, saying there needed to be recognition that the impact of COVID-19 had gone far beyond airlines and right through the aviation industry.

“We continue in good faith to operate our terminals on almost no revenue, continuing to provide essential support for airlines, government and passengers, as well as assisting tenants who are also suffering a catastrophic decline in the business,” Mr de Graaff said.

“We would expect that our costs to maintain essential operations are met by the airlines, which in this case are being subsidised by the government.”

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Melbourne Airport CEO Lyell Strambi was hopeful the government support for airlines meant bills would be paid on time.

“We do rely on our airline partners ensuring cash makes its way through the system,” Mr Strambi said.

“For smaller operations, we also own Launceston, some funding support would definitely help cushion the blow.”

Many airports are still seething over the fact Qantas has refused to pay rent for lounges and office space since the start of February.

One capital city airport revealed that even grounded low-cost carrier Tigerair had met its rent obligations for February, while owner Virgin Australia had sought a deferral.

Domestic aviation statistics show passenger numbers were down only 2.2 per cent in February, which airports have suggested meant Qantas would have collected close to its expected revenue for the month.

However, the airline has refused to pay rent dating back to February 1 and has deferred payment of aeronautical fees for February and March indefinitely.

Mr Bourke said Qantas would share in $1bn of government assistance that had already been announced and was almost exclusively for airlines.

“We support this funding, but the beneficiaries must also do the right thing by their suppliers and partners,” he said.

“Cash flow is critical to getting through this crisis and failure to pay overdue accounts will put more aviation jobs at risk.”

A Qantas spokesman said it had made a number of decisions in an effort to manage cash flows to ensure the airline could resume normal operations when demand for air travel returned.

“Everyone connected to aviation is having to bear the brunt of demand for air travel evaporating,” he said.

“We are also asking our suppliers to support us during these unprecedented times.”