The Australian Government continues to dampen expectations about re-opening its international borders and allowing its citizens to begin traveling again. On Tuesday, May 11, the Australian Government handed down its annual budget. In his remarks, the Australian Treasurer Josh Frydenberg tempered expectations of any significant international travel resuming before mid-2022.
“With respect to international borders, it’s quite a conservative, cautious assumption that international borders will gradually reopen from the middle of next year,” said the Treasurer.
Josh Frydenberg said, as a result, international airline and passenger traffic would stay low until then, with improvements in numbers expected from mid-2022. The Treasurer also defended the now 14-month long international border closure.
“We closed our borders. Australia’s fate could have been so much worse.”
Australian Government changes course on border reopening dates
Mr Frydenberg’s prediction echoes what other government ministers and senior health officials have been saying to Australians – sometime in 2022 is the target date for a border reopening.
“We won’t be seeing borders flung open at the start of next year with great ease,” said Finance Minister Simon Birmingham last week.
While continued border closures are angering some Australians, especially as the vaccination program is underway, there’s speculation concerning an election later this year. With voting compulsory in Australia, the Australian Government is doing two things. Keeping borders closed to everyone is appealing to the fortress Australia voter base who don’t travel (only about 57% of Australians have passports). Secondly, it minimizes the risk of any COVID-19 outbreaks, thereby maximizing the government’s re-election chances.
It is a significant shift in messaging. Just weeks ago, Australian Prime Minister Scott Morrison flagged relaxing travel and quarantine restrictions for vaccinated travelers later this year. The Prime Minister is now busy walking back from that, saying borders will only reopen “when it is safe to do so.”
Quarantine and more repatriation flights for the foreseeable future
Instead, the Australian Government is pumping billions of dollars into quarantine and plans to lay on some 120 repatriation flights to extract roughly 17,000 Australians still stuck overseas. That is around half the number of Australians registered as wanting or needing to get home.
Meanwhile, the budget mostly ignored requests for further assistance for the airline sector. In fairness, the Australian Government has already, directly and indirectly, poured significant money into the industry. While the international airline sector in Australia continues to suffer, the domestic airline sector is flying high, close to or exceeding 2019 capacity and traffic levels.
Bad news for Qantas
But for Australia’s big international flag carrier, Qantas, 2022 target dates for international border reopenings are bad news. The airline was counting on an October 31 start date for the bulk of its international services. That start date was based on Australian Government timelines provided earlier this year.
Now it looks like Qantas will have to push back a start date for international services to mid-2022. CEO Alan Joyce has already said his timelines were flexible. However, planes on the ground equates to money lost. With that in mind, Mr Joyce is keen to get his planes and crews back in the air.
Josh Frydenberg did offer the airline industry some limited relief. In his budget remarks, the Treasurer said;
“In this Budget, the Government is providing additional support to keep planes in the air and to preserve an international airline capability. This builds on the (AU)$2.7 billion of support provided during the height of the crisis.”
While some relief packages were targeted at the domestic airline sector, in terms of the international airline industry, the Treasurer said;
“A new $200 million International Aviation Support payment will preserve an Australian international airline workforce and operational capability. This will protect up to 8,000 jobs and enable international flights to resume when borders reopen.”
But the billion-dollar question for Qantas and millions of travelers is when will Australia’s borders reopen? Right now, it’s just a vague mid-2022 goal.
