Apr 22, 2020






SUBJECTS: Coronavirus; Virgin Australia; support for Australian aviation industry during COVID-19; lifting of COVID-19 restrictions.


THOMAS ORITI, HOST: Anthony Albanese, Virgin Australia isn’t the first airline in this country to face serious financial difficulties. Events like what we’ve seen this week obviously reminds many of us of the Ansett collapse, for example. Can the Australian market realistically support two carriers?


ANTHONY ALBANESE, LEADER OF THE AUSTRALIAN LABOR PARTY: It certainly can. And that’s what the Aviation White Paper found in 2009. And indeed, we have an ideal airline structure here in Australia at the moment with two full-service airlines, Qantas and Virgin supplemented, of course, by important regional airlines such as Rex, Air North and some other smaller carriers.


ORITI: You’ve blamed Scott Morrison’s leadership on what’s happened here. But why should the Government extend a lifeline to an airline that’s majority foreign-owned?


ALBANESE: No, well what I’ve blamed, of course, is the Coronavirus pandemic is directly responsible for this. I have been critical of the fact that the Government have been complacent about this. The fact is that there’s an Australian national interest in having two airlines. We’ve seen what the consequences of having a single airline is for issues like prices, for routes. We live in an island continent with a relatively sparse population spread across such vast distances. Which is why aviation is particularly important. Other national governments have recognised during this crisis the need to provide support for airlines. And it’s important as well to recognise that some of the Government’s rhetoric just isn’t right. There is not a $1 billion bailout, for example, for the airlines. What that is was a waiving of fees for things like air traffic control and landing charges at a time when planes simply aren’t flying. So, it’s of no benefit.


ORITI: But you have said, as you said, you’ve accused the Government of complacency with this and you say Labor wants the Government to take an equity stake in Virgin. But do you think that even if the Prime Minister took that approach, the airline would be able to operate as it currently does? And by that, I mean, it’d be leaner in terms of the number of routes across Australia, not to mention the number of people that it employs.


ALBANESE: Well, the Virgin budget situation isn’t actually about people. The people are providing services and they are good jobs. And people are fulfilled by partaking in those jobs. There is an issue with the capital investment when Virgin made a decision to, for example, take over some of the capital from SkyWest. That was not a good decision for the company. And there are issues with regard to the number of aerial assets that the company has that simply aren’t being used at the moment. And those issues need to be dealt with and the companies were aware of that was prepared to engage in that.


ORITI: And given those challenges, can you envisage a scenario where Virgin Australia continues to provide strong domestic competition to Qantas?


ALBANESE: It can, but it needs to be, now it’s more difficult now that they’re in voluntary administration. We need to make sure that Deloitte do their job and get the right ownership structure arising out of the difficulties which are there and an ownership structure that’s prepared to recognise the important national interest and not just asset strip the airline. We have seen that occur with some takeovers of equity companies in the past, and we don’t want that to happen.


ORITI: I’m sorry, interrupt but just on that point. According to the administrator, there are no plans for new redundancies at the moment.


ALBANESE: And that is a good thing.


ORITI: Do you think it’s realistic that thousands of Virgin workers will actually get through this crisis with a job at the other end?


ALBANESE: Well, I hope that’s the case. And what I’m saying is the Government needs to play a role in that rather than just sitting back and saying it’s up to the market. Where I’ve been critical is a Government that says it’s up to the market, but the markets have been shut down by a government policy decision. So, there’s a direct relationship between the two events.


ORITI: Just on another note briefly, the Government’s taking a cautious approach at the moment to easing these restrictions we’re all living under at the moment. It’s obviously a tough time for many. Do you think we’re taking the right approach?


ALBANESE: The Government’s right to be cautious and they’re right to take the expert medical advice. What we don’t want is to lift restrictions, see an uplift in the number of infections and then have to reimpose them in a stronger way. The task here has always been to get the health outcomes right first, and then that will lead to better economic outcomes. There’s no shortcuts here.


ORITI: Anthony Albanese. Thanks very much for speaking to The World Today.


ALBANESE: Thanks for having me on the program.