Australia will subsidise 800,000 domestic flights, help its two main airlines and offer cheap loans to small tourism operators as part of a $1.2 billion package to revive the travel sector.
Tourism is one of the nation's biggest industries, worth more than $60 billion and employing about 5 per cent of the country's workforce. But the sector was crippled when the country shut its international borders in March 2020 to curtail the spread of Covid-19 - leaving tens of thousands of people dependent on JobSeeker payments.
Seeking to prop up the industry when the subsidy scheme ends this month, Prime Minister Scott Morrison pledged another stimulus package for the travel sector.
Mr Morrison said Australia will subsidise the flights of 800,000 domestic flights between April 1 and July 31 while its international borders remain closed. It will pay 50 per cent of the cost of flying to 13 destinations, including the Gold Coast, Launceston and Alice Springs. Airlines have agreed to provide additional flights to those places.
"This is our ticket to recovery - 800,000 half-price air fares to get Australians travelling," Mr Morrison said in a statement.
The government will provide financial support to Qantas and Virgin Airways between April 1 and October 31, when international flights are expected to resume.
Mr Morrison did not disclose the scale of the funds, which will be used to keep 8600 workers employed, planes in "flight-ready condition" and international passenger services at a pre-pandemic levels.
Australia will also offer loans of up to $5 million to tourism businesses such as tour companies, with two-year repayment holidays, the prime minister said.
"We need Australians to do their patriotic duty and book a holiday this year," trade minister Dan Tehan said.
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