Who is the rescue package supporting?

Rescue package. But only for some.

As recently as this Monday, 8th March 2021, the Australian Tourism and Transport Forum (TTF) championed the industry's cause for government support, stating that “the fact remains that despite some intrastate visitation slowly coming back, as state border closures or merely the threat of them continues to dominate the headlines, widespread consumer confidence and travel is at an all-time low.". They have been calling for a support package for some time now, and this week Morrison, Frydenberg and Tehan will deliver something very close to what they have been asking for.

The TTF also made the following statement: “That is why as the vaccine is rolled out, TTF calls on National Cabinet to commit to put politics and state electioneering aside and commit to keeping state borders open once and for all". Clearly someone needs to get a grasp of Section 92 before putting pen to paper at the TTF (and yes, they are not the first to make this mistake: if you remember 6 months ago there was a similar s92 debate that ended quickly when the Federal Government realised that States were well within their powers in the present circumstances). Time to get better legal advice methinks.

But before examining the current industry rescue package, it is worthwhile examining who is on the TTF Advisory Board, as this gives context to what Morrison et al are announcing this week.

The board consists of CEO's from a range of businesses - hotel groups, superannuation funds, airports, cruise companies, airlines, government (transport and main roads departments), transportation companies, and payment companies (like MasterCard). Nowhere, among the 24 smiling faces, do we see Scroo Turner or any representatives from retail or wholesale travel companies - the "middle men" of the travel industry. Instead, we see only "end users" - hotels, airlines, roads and airport organisations - so it is not surprising, therefore that the lobbying by the TTF is not focused on travel booking companies, like FLT, but is instead focused primarily on "general tourism consumption".

Whilst the package (the final details to be released later today) includes cheap flights and support for regional Australia, the only real support for companies like FLT are in the form of low-interest, long term government loans, which themselves are very small (capped, based on company size) and really only designed to keep small zombie-esque agents alive for the short-term. Yes, there will be some flow on benefits to FLT (in the form of regional hotel and ground transport bookings), but the majority of the airline-focused package will have little impact on FLT as the profit margins are pretty much zero and there is an expectation that the "cheap fare sale" will be mostly online due to its limited and competitive nature.

I am perplexed. Where is the comment from Scroo? Where are FLT's PR people? And why are they not pointing out the bleeding obvious: there is zero long term benefit to the industry in keeping zombie companies alive and ignoring the major players in the industry (like FLT) who make up 80% of total TTV. It seems that this package is more about keeping companies like Quest and Accor happy, rather than keeping the middle man alive.

By TTF's own admission, the Australian tourism annual spend has fallen from $152 billion to around $71 billion in the past year. This government package - which carries the headline of "$1.2 billion in assistance" - hardly comes close to addressing even a small percentage of that fall. Half price tickets to 800,000 travellers is merely going to prop-up domestic airlines and hotel operators, but is hardly going to pay the piper when it comes to FLT. And low-cost loans for small employers will merely prolong the pain for many smaller, independent agents, and perhaps bankrupt owners who are cajoled into signing up for the government's 10 year debt programme.

If I were Scroo, I would be angry. And if I were the head of a listed company, I would be vocal about it.


Kit.