Virgin collapse sends shockwaves through Qld tourism sector

Queensland’s tourism sector has voiced alarm at the collapse of Virgin Australia and its potential impact on the state in the long term.

“Having the aviation market disrupted in this way and its competitiveness threatened will have very significant long-term implications, for not just the tourism industry but for the community in a country that is so decentralised and so dependent on viable air services,” Queensland Tourism Industry Council CEO Daniel Gschwind told The Courier Mail.

Townsville Mayor Jenny Hill said a duopoly was essential to “to keep the price of airfares down” while Gold Coast Mayor Tom Tate said the southeast region would be the hardest hit.

“It doesn’t matter how good the marketing is, supply of the air traffic is being reduced remarkably, and the main tourism that Virgin afford us is the domestic market which is really the backbone of our tourism,” he said.

The Australian Tourism Export Council (ATEC) said a competitive airline environment was needed to return tourism back to its previous highs.

“Without affordable and accessible domestic air routes tourism’s hopes for recovery will be bleak,” said ATEC managing director Peter Shelley.

“Domestic and international tourism combined delivered $146 billion to the economy last year and the loss of one of our major airlines will have catastrophic flow-on impacts that will ultimately also see our international capacity damaged.

“After bushfires, floods and a pandemic, Australian tourism needs a break. To be hit with another huge setback will severely impact the industry’s road to recovery, especially for regional Australia where air access is the lifeblood of the tourism industry.”

The Australian Tourism Industry Council (ATIC) said it was a difficult moment for Australian’s aviation sector.

“These are the most challenging of times,” said ATIC executive director Simon Westaway.

“The uncertainty around what level of future lost volume of flights and seat capacity that came from a second airline group is obvious in its negative impact.

“It is also important that we oversee operating and regulatory conditions to ensure a strong sustainable and competitive Qantas Group into the future.

“This creates opportunity for whatever the future structure of Virgin Australia may ultimately become or for any future prospective Australian-based airline entrant that may emerge.

“Australian tourism and our greater visitor economy need ongoing support. That argument is only made even louder today.”

Tourism Accommodation Australia (TAA) said a recovery for the hotel sector was reliant on a competitive domestic aviation sector.

“Initially, as we eventually move out of the Covid-19 crisis, the hotel sector will be heavily reliant on domestic tourism, with international borders expected to be closed for many months,” TAA CEO Michael Johnson said.

“There are very real fears an airline monopoly would take away the competitive edge needed to ensure corporate, conference and leisure guests are well catered for in our key recovery markets.

“Accommodation hotels in regional destinations in particular, such as Cairns, are heavily reliant on both Virgin and Qantas and the existing competition between both. The last thing they need is for a national carrier to collapse.”