Australia unveils $928 mln Covid-19 stimulus package for tourism industry

The Australian government unveiled a A$1.2 billion ($928 million) tourism support package on Thursday, aimed at boosting local travel while international routes remain closed because of the coronavirus pandemic.

The basket of airline ticket subsidies for travellers, cheap loans to small tour companies and financial aid for the country's two largest airlines is designed to keep the critical sector ticking over until foreign tourists return.

"This package will take more tourists to our hotels and cafes, taking tours and exploring our backyard," Morrison told reporters in Sydney.

"That means more jobs and investment for the tourism and aviation sectors as Australia heads towards winning our fight against Covid-19 and the restrictions that have hurt so many businesses."

Tourism is a major growth driver for the Australian economy, generating A$60.8 billion in gross domestic product (GDP) in 2018/19 and employing around 5% of the country's workforce.

The sector was hard hit when Australia closed its international borders - with a few exceptions for returning nationals and some others - a year ago to prevent the spread of Covid-19. A series of internal state and territory border closures sparked by Covid-19 outbreaks exacerbated the downturn.

The country's two major airlines, Qantas Airways Ltd and Virgin Australia, slashed flights and put planes into hibernation while thousands of people across the industry became reliant on a federal government wage subsidy programme, which expires this month.

The support package includes A$200 million for Qantas Airways Ltd and Virgin Australia from April to October to help maintaining mothballed aircraft, bringing planes out of storage and wages for international flying staff.

"This program allows those people to stay connected with Qantas so we don't lose them ... because when the borders open up, we need the capability to start as many flights as possible," Qantas Chief Executive Alan Joyce said.

Qantas hopes to resume some international flights by the end of October, when Australia expects to complete its national Covid-19 immunisation drive. Morrison said it was "too early" to confirm a projected date for the international border to reopen.

The 50% subsidies on some 800,000 plane tickets will be focused on destinations that usually rely heavily on foreign tourists, including Alice Springs and Kangaroo Island, and will be available from April 1 until the end of July.

Shares of travel-related stocks led gains on the Australian sharemarket, with travel agents Flight Centre Ltd up more than 10% and Webjet Ltd up more than 3% to trade near one-year intraday highs. Qantas was up 2% in early afternoon trading.

However, not all industry groups were happy with the support package, which also includes cheap 10-year loans for small tourism companies, many of which are struggling under mounting debt.

"This narrowly targeted package is disenfranchising for many hard-working operators in the tourism industry whose plight is being ignored," said John Hart, executive chair of the tourism division of the Australian Chamber of Commerce and Industry.

"The package also fails to acknowledge that up until the Covid-19 pandemic, the tourism industry was poised for enormous growth."