29 March 2024
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Save our airports and let us fly!

Peter Switzer
10 August 2020

The question is: who should the Federal Government help? And it has become very timely as the aviation industry has started flying its kite, asking for $220 million to keep their airports open and operating!

Now you might be pondering: “If we give it to these guys, where do we stop?” And it’s a fair inquiry. The answer isn’t easy. It has to get down to the importance of a particular business to the wider economy.

I’ve often been described as a small business champion and I feel for the café and restaurant owners out there who’ve been crushed by the Coronavirus and all the governments’ decisions that have followed to ruin their once flourishing businesses.

But the Government in Canberra has done a surprising amount of heavy lifting support to every affected business by bringing in the JobKeeper wage subsidy. It has even extended it as the circumstances of the rebound were made more serious via Victoria’s second-wave infection issues.

So the question is: do airports (represented by the Australian Airports Association (AAA)) have a case for special treatment?

Domestic and regional travel was down 92% in June but this was better than the 96% slump in May. However Victoria’s viral problem will rob airports of this improvement.

Most of us see airports as launch pads for holidays or doing business but they are businesses in their own right with retail precincts, which have been effectively closed down to protect medically vulnerable Australians from being killed by the Coronavirus.

They are also crucial infrastructure businesses making both internal travel, local commerce, tourism exports and product exports happen.

The tourism/education business is now our third biggest export and airports are crucial cogs in this big machine that delivers a lot of the income that powers our economy and related lives.

A month ago these airport businesses were hoping for a rebound but then Victoria’s virus resurgence changed all that.

The AAA says its members need assistance (what has been described as AvKeeper) and has the following wish list:

  • $220 million for 12 months to pay for domestic and international security screening costs, COVID-19 cleaning in terminals and essential airfield maintenance for the next 12 months.
  • A plan to open the borders where we start acting as a country again not a whole bunch of separate ‘state- countries’.

There is a case to treat the airports as special but there’s also a case to give it to them in a different way.

You see, we help farmers in drought for two reasons. First, they are a crucial industry for feeding the nation and they are important exporters. Second, we see that there is a human toll that affects the regions of Australia. Helping them is the right thing to do.

And because most farmers are not living the life of Riley (at least for long), we don’t come asking for payback when times get good. Why? Because they seldom last very long in a country “of droughts and flooding rains”, to quote Dorothea Mackellar. And let’s not leave out bushfires in a year where our country cousins have copped fires, now floods, COVID-19 and that ‘little’ threat called a damn recession!

That’s helping farmers. But when it comes to airports, let’s give them AvKeeper to get them through these tough times. And they are tough, with Canberra Airport to close on Saturdays from August 22 and soon might even shut for another day each week.

So what kind of help might be both timely but unique?

I propose we support them now but, when times pick up, charge them a levy based on their ability to pay. Anyone who has felt the economic pain of parking at an airport, seeing the extra charges on a taxi bill to get out of the place when you fly interstate and then the cost of anything you consume (which always seems to have some kind of ‘airport levy’ on them because you don’t have the option to go outside of the shopping precinct once you’ve gone through security).

The chart below shows how good a business Sydney Airport is:

At its height before the Coronavirus, its share price was $9.18. Now it’s $5.34. The analysts think it will eventually crawl up 14.8% in the shorter term but over time, when normalcy one day returns, that share price will start moving towards $9 again.

That will be when we are flying internally and internationally and airports are performing a crucial function for our economy, our businesses and our lives.

That’s when the Government can come calling for payback.

One final issue that needs to be fleshed out is when we can fly around the country again. ScoMo and his State Premier buddies need to come up with a plan ASAP. Sure, Victoria is out for a time but there has to be a way that perfectly healthy people from non-Victorian states can move around the country.

One unusual process might be:

  • Ticket bought.
  • Coronavirus test taken.
  • Two-day wait in a hotel room before test results.
  • Fly!

I know it looks crazy and costly but there are those who would pay it for a chance to do interstate business face-to-face or lay in the sun at Port Douglas!

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