Cut price plane tickets to send 800,000 travellers to the regions

The big winners from the package are Qantas and Virgin, which can use the subsidies to cut fares on major tourism destinations, but the help will also go to smaller airlines on regional routes.

The 13 regions that qualify for the cut-price fares include Lindsay Fox’s Avalon airport near Geelong, which could give travellers an incentive to go to regional Victoria and Melbourne.

The key NSW destination is Merimbula on the state’s south coast but there is no equivalent location on the north coast despite the scale of the tourism industry around Byron Bay.

The list includes the Gold Coast, Cairns, the Whitsundays and Mackay region (which includes Proserpine and Hamilton Island) as well as the Sunshine Coast in Queensland.

Alice Springs and the Lasseter region (which includes Uluru) qualify in the Northern Territory, along with Broome in Western Australia and Kangaroo Island in South Australia.

The new spending was approved by federal cabinet this week but kept confidential within government until late on Wednesday when ministers contacted some industry groups to let them know of the policy.

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The government is open to negotiating other destinations with airlines within the overall cap of 800,000 tickets.

Describing the subsidy as a “demand-driven” scheme, the government says it will cut the price of about 46,000 fares every week. The discounts will be offered on flights to and from the tourist destinations.

Customers will be able to buy the half-price tickets from airline websites from April 1, with the government relying on competition rather than regulation to make sure the benefits are passed on to consumers.

Airlines will have to show they have flown the route over the previous two years in order to gain the subsidy.

The loan scheme for small employers is backed by a government guarantee over half the loan but it assumes banks will lend the money.

To qualify, small employers would have to “graduate” from the JobKeeper scheme at the end of this month, and would therefore have to have shown a reduction in turnover to qualify for the wage subsidy this quarter.

The companies would have to have the loan approved between April 1 and December 31 this year and could use this for overdrafts, leases and other lending provided it is not for a credit, debit or charge card.

While the terms of the loan scheme are new, the financial support falls within the government’s commitment last year to support up to $40 billion in lending with a guarantee over half the value of each loan.

As well as the support for international aviation workers, the package includes payments for airport services to keep ground handlers in work.

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This part of the scheme runs from March 29 to September 30 and assumes it will ground handling companies will need about 30 per cent of the workforce they had before the pandemic.