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Federal Gov Subsidise Foreign Airlines?

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Federal Gov Subsidise Foreign Airlines?

Old 4th Jul 2020, 00:10
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Federal Gov Subsidise Foreign Airlines?

I hope with the extension of IFAM (International Freight Assistance Mechanism) that the Federal Government approves Australian Airlines for these flights.
I know that Australian Airlines might not service some routes but I hope preference is given to our operators.
Seeing that a lot of International airlines are operating here only because they have financial assistance from their own governments, it would be a pity to see Australian tax payer money further subsidising foreign carriers and foreign jobs.
Thoughts?
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Old 4th Jul 2020, 00:35
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Will the government continue to pay JobKeeper to VA employees now that it is a 100% foreign owned company? Sad if they donít, but they set the precedent by not paying it to Swissport or Toll Dnata employees.
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Old 4th Jul 2020, 00:49
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Originally Posted by brokenagain View Post
Will the government continue to pay JobKeeper to VA employees now that it is a 100% foreign owned company? Sad if they donít, but they set the precedent by not paying it to Swissport or Toll Dnata employees.
Dnata is owned by a foreign government as opposed to a vanilla foreign entity. As far as Iím aware the others are eligible for JobKeeper.
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Old 4th Jul 2020, 00:57
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-the entity is a sovereign entity or an entity owned by a sovereign entity

Is Bain capital owned by a sovereign entity now?

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Old 4th Jul 2020, 01:31
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Originally Posted by Wingspar View Post
I hope with the extension of IFAM (International Freight Assistance Mechanism) that the Federal Government approves Australian Airlines for these flights.
I know that Australian Airlines might not service some routes but I hope preference is given to our operators.
Seeing that a lot of International airlines are operating here only because they have financial assistance from their own governments, it would be a pity to see Australian tax payer money further subsidising foreign carriers and foreign jobs.
Thoughts?
The International Air Freight Assistance program was contracted off to Qantas to manage with 14 other approved sub-contractors; AMI, Cathay, CT Freight, DHL, Emirates, Etihad, FedEx, JAL, Kuehne + Nagel, Qatar, Schenker, SIA, Toll and Virgin. The assistance is Australian-facing in that it subsidises Australian producers to be able to ship consignments overseas at reduced rates to the consignor. You can argue about the mechanics but we're not subsidising foreign airlines; IFAM is simply directing business their way at commercial rates.
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Old 4th Jul 2020, 02:14
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Originally Posted by MickG0105 View Post
The International Air Freight Assistance program was contracted off to Qantas to manage with 14 other approved sub-contractors; AMI, Cathay, CT Freight, DHL, Emirates, Etihad, FedEx, JAL, Kuehne + Nagel, Qatar, Schenker, SIA, Toll and Virgin. The assistance is Australian-facing in that it subsidises Australian producers to be able to ship consignments overseas at reduced rates to the consignor. You can argue about the mechanics but we're not subsidising foreign airlines; IFAM is simply directing business their way at commercial rates.
Subsidising is my subjective term.
For example, Qantas has no commercial international network yet others in the IFAM list do. They do have a network because of financial assistance from their respective governments.
Its not commercial.
However if the Australian Government assistance package selects a foreign carrier then that puts money into their coffers. I would call that a subsidy! Others may not.
Now Qantas is reliant on this package to operate a very limited network and they have to bid against these foreign carriers.
Hence my position.

Last edited by Wingspar; 4th Jul 2020 at 02:28. Reason: Spelling
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Old 4th Jul 2020, 02:49
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I don’t think Bain “own” Virgin yet. Maybe waiting for the final sign off a their final vote?
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Old 4th Jul 2020, 03:55
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Originally Posted by Wingspar View Post
Subsidising is my subjective term.
For example, Qantas has no commercial international network yet others in the IFAM list do. They do have a network because of financial assistance from their respective governments.
Its not commercial.
However if the Australian Government assistance package selects a foreign carrier then that puts money into their coffers. I would call that a subsidy! Others may not.
Now Qantas is reliant on this package to operate a very limited network and they have to bid against these foreign carriers.
Hence my position.
I take your point.

However, IFAM is not there to subsidise international flights; it's an AusTrade program designed to subsidise farmers and producers by maintaining and opening export opportunities. Department of Infrastructure, Transport, Regional Development and Communications has already thrown over $130 million at supporting Australian airlines maintaining international flying via the repatriation and minimal international network programs. At some point there has to be a value-for-money test. If you were to take IFAM money and give it to QF or VA to run international freight services I doubt whether you would get anywhere near the utility from your outlay.

And it's probably relevant that QF and VA have large domestic operations that are being subsidised by the government via the minimal domestic network program. Government has already put nearly $190 million into that. So, Australian airlines have already been the beneficiaries of well over $300 million in government subsidies just via the two minimal network programs.

I don't know what money Etihad, Emirates and Cathay have received from their respective governments but bear in mind that they don't have domestic networks so their government support manifests itself entirely in the international market.

Interesting times though.
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