Exodus by foreign airlines a risk for tourism recovery

International airlines have warned they may not be around to bring overseas tourists to Australia when borders finally reopen.

Busier times for Sydney International Airport.

The nation could emerge from the COVID crisis with only a handful of foreign carriers operating in Australia, making it difficult to ­restart international tourism.

Already the number of international airlines operating regular services has plunged from 54 to 15, plus a few ad hoc flights by other carriers.

The body representing airlines such as Singapore, Emirates, Qatar, Etihad and Cathay Pacific has raised the alarm, as tight quarantine caps continue to restrict the number of passengers on inbound flights, and the number of people flying out of the country dwindles. Board of Airline Representatives of Australia executive director Barry Abrams said that prior to COVID-19 international carriers accounted for 66 per cent of the market, or about 2.6 million seats a month.

“We are now down effectively to 15 international airlines maintaining some level of capacity into the major capital city airports,” he said. “If the difficult commercial conditions continue for, say, ­another six months or so, it is not unreasonable to expect this minimal capacity and remaining international airlines to potentially halve in line with the very low passenger volumes.”

Latest federal government data showed in January international flights to and from Australia operated with a mere 14 per cent of seats filled, compared to 83.6 per cent a year ago. Despite the near-empty aircraft, airlines were still having to fork out as much as $13,000 per flight to Airservices Australia and up to $500 a passenger to airports under fixed payment agreements.

Mr Abrams said any economic recovery would be more difficult without a competitive international aviation industry servicing Australia, and he urged the federal government to provide a “modest level of assistance” to foreign airlines. “All of those carriers and all that capacity is going to be critical to restarting Australia’s international tourism,” Mr Abrams said.

“A number of members have expressed their frustration that, from what we can see, those flights bringing in stranded Australians are the only … flights not getting some form of support from the commonwealth government.”

Only Qantas and Virgin Australia received funding in the government’s recent $1.2bn aviation support package, which included more than $200m to retain international flying capability.

Another challenge facing foreign carriers was the variation in regulations from state-to-state.

Karl Schubert of Singapore Airlines said each capital city had its own set of rules, some of which made no sense. “In Adelaide, for instance, infants are classified as taking up an arrival cap even though they don’t take up a seat on the plane or the quarantine bus, or an extra room in the hotel,” Mr Schubert said.

“If we have five infants on a flight into Adelaide, that’s five adults that we can’t take on that flight. No other state classifies ­infants as part of the arrival cap.”

The Australian Airports ­Association had some sympathy for international airlines but chief executive James Goodwin said fees collected fell a long way short of the cost to his members. “Airports are currently absorbing significant security screening costs because, despite the low passenger numbers, the equipment and screening staff are still required to be operational,” he said.