Australian domestic market growth still defying global trends; Tiger, Jetstar and Virgin Blue stimulating Gold Coast traffic

Image: Virgin Blue
Virgin Blue began Melbourne-Mildura services in October – the inaugural flight was celebrated with champagne and one-off Mildura launch flight t-shirts. Virgin Blue chief commercial officer Stefan Pichler said: “We chose Mildura to be Virgin Blue’s newest regional destination as it ticked all the boxes in terms of population base, existing airport infrastructure, tourism growth potential and also largely thanks to a pro-active and supportive council and business community who encouraged Virgin Blue to bring its services to the Sunraysia region.”

While just about all other major domestic air travel markets have experienced a reduction in demand in recent months, Australians are still travelling in growing numbers within their country. However, in August and September growth was below the 7% (or more) achieved previously in 2008.

Chart: Australian domestic air traffic growth
Source: BITRE

In the third quarter of 2008 passenger growth was 5.8%, down from almost 8% in the second quarter. However, traffic growth has been achieved at the expense of load factor which was down around two and a half percentage points in the third quarter to just over 79%.

Melbourne – Gold Coast is still fastest growing major route

Comparison of year-on-year figures for the busiest domestic routes in Australia reveals that in September five of the top nine routes were growing by less than 5%. The Sydney to Perth route has been growing by between 5% and 10% this year, while Melbourne to Adelaide has been growing at between 10% and 15%. These are all routes on which Tiger Airways competes against Virgin Blue and Qantas/Jetstar.

Chart: Top Australian Routes
Source: BITRE

The fastest-growing major route all year has been the one between Melbourne and the Gold Coast. It is now the country’s seventh busiest domestic air route. This winter (or summer if you are in Australia) competition on the route is provided by Jetstar (six daily flights), Virgin Blue (five daily flights) and Tiger Airways (three daily flights).

Tiger drops two routes from Melbourne base

The fastest growing route in September was Melbourne to Darwin where traffic had doubled to 26,500 passengers. This can be attributed to Tiger Airways, which started a daily service last November. However, the airline has now abandoned the route (at the end of October) citing excessive airport charges at Darwin as the major issue. This is the second route that Tiger has dropped from its Melbourne base this year. Services to Newcastle ended on 11 August.


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