Travel industry still a long way from full recovery

Australian domestic flights have resumed but planes are far from full. Pictures: Shutterstock

Australian domestic flights have resumed but planes are far from full. Pictures: Shutterstock

Are we there yet? I feel like a child in the backseat, asking the question even though I know the answer, also aware that constantly thinking about it doesn't help us get there any faster. But, seriously, are we there yet? Is this pandemic over?

Of course, opening international borders is a long way off, but it does seem like we're getting back to some form of normality with domestic travel. Whatever 'normal' is these days. As Australians, we've come to accept that everyday life means social distancing, checking in at every venue, and having strong opinions about which of our premiers and chief ministers are heroes and which are villains (short answer - everybody seems to like their own and dislike all the others).

Regional travel has been booming over the summer, with road trips the safest option for many people who don't want to leave their state or territory, lest a border is unexpectedly slammed shut behind them. But now the skies are getting busier with planes (remember them?) regularly zipping between most capital cities.

There are almost 80 flights every weekday between Sydney and Melbourne at the moment - still a long way from the pre-coronavirus average of about 150, which made it the second-busiest air corridor in the world, but much better than at the height of the lockdowns.

As someone who is travelling quite regularly at the moment, I can tell you from experience that these flights are still not too full, though, and this is something the airlines are now making a big effort to rectify. Qantas and Virgin Australia have this week engaged in a price battle (it's probably not big enough to call a 'war'), offering cheap seats across the domestic network to get people flying again. And, more importantly, Qantas is offering unlimited date changes for free until January 2022 (although you may have to pay a price difference) and, in response, Virgin Australia may extend its no-fee cancellation and change offer, which currently goes to 30 June 2021.

When Qantas announced its new policy this week, the airline's group chief customer officer, Stephanie Tully, said, "By giving customers unlimited flight date changes for almost a year, we think it will encourage more people to book, helping to boost tourism which is so vital to local economies and businesses around the country."

Qantas announoced a new policy this week to get people flying again. Picture: Getty Images

Qantas announoced a new policy this week to get people flying again. Picture: Getty Images

And while it may seem patriotic to market this move as trying to help the national economy, it is, of course, Qantas's financials that are the real priority. Getting payments now for flights in the future is imperative to keep companies in the black (or less in the red, more likely).

It's one of the biggest issues facing travel companies and it's going to get a lot worse for them - and maybe you - next month when the federal government's JobKeeper payments end.

Many businesses have been relying on this program to see them through the most difficult time the travel industry has ever faced. But jobs that have been saved for the past year are now already being lost, as annual leave and other payout entitlements are taken into consideration with just six weeks until the end of JobKeeper.

"Australian tourism businesses have hung on with the support of JobKeeper but face annihilation once the program ends next month if the government fails to provide further support," says Peter Shelley, the managing director of the Australian Tourism Export Council.

The biggest threats are to two general parts of the industry - inbound and outbound. In other words, businesses that focus on international tourists who come to Australia (such as tour operators), and those that focus on Australians going overseas (such as travel agents). The end of travel agents due to online bookings has been predicted for years but they had actually become more popular over the past decade, with the clever ones adapting to the digital age. However, the pandemic may be a threat they can't evolve through. A recent survey by Small Business Australia found only 10 per cent of travel agents expect to survive past April.

Travel agents will be hit hard when JobKeeper ends next month. Picture: Shutterstock

Travel agents will be hit hard when JobKeeper ends next month. Picture: Shutterstock

The problem here for you, as a traveller, is that these travel agents may still have some of your money, in the form of credit for trips cancelled because of the pandemic or holidays you've booked for the future. If they went bankrupt, what would happen to your vouchers? Would you be the first creditor in line?

It's an unfortunate situation because travel agents were some of the unsung heroes during the start of the pandemic, working hard to get refunds for their customers, even while they were receiving no new income. And the reason they now face financial collapse is not their fault - not because they failed to innovate, for instance - but because government rules are keeping the borders shuts and their customers away. Hopefully those same governments will be willing to offer assistance.

You may feel like we are almost there. You may actually be quite happy that you can grab a cheap airfare and do a weekend trip to Sydney or Melbourne, spending a little of those savings you had put aside for an international jaunt. And you should! But for some parts of the travel industry, the worst is yet to come.

You can read more from Michael Turtle on his Travel Australia Today website.