Adelaide – Melbourne now #4 in Australia; Qantas and Virgin Blue have cut capacity by over a quarter

Image: Tiger Airways at  Adelaide & Melbourne
When Tiger Airways entered the market between Adelaide (left) and Melbourne (right) in late 2007, the route was a Qantas/Virgin Blue duopoly. Since then, Qantas has also let its low-cost subsidiary Jetstar take on the competition on the route. During the same time period, the number of passengers on the route has grown by 13% between 2007 and 2008.

When Tiger Airways launched its Australian subsidiary from its base in Melbourne in November 2007, one of the first routes to be served with multiple daily flights was Adelaide. Double-daily flights began in January 2008 on Australia’s then fifth busiest domestic route, helping it to leap-frog Sydney – Gold Coast into fourth place.

Chart: Adelaide - Melbourne air traffic 1995-2008 - Annual passengers (millions)
Source: BITRE

Between 1995 and 2003 traffic growth on the route averaged just 2.4%, but in the last five years this has trebled to an average of 7.2%. At just under 650 kilometres, air travel between the two cities could come under pressure if a high-speed rail (HSR) link were ever built. However, Australia currently has no HSR services. At present, plans for HSR services are focussed on connecting Canberra, Sydney and Melbourne, but even these are only proposals and a long way from being approved and built.

Chart: Adelaide-Melbourne air traffic 2006-09 - Monthly passengers
Source: AENA

In the first half of 2009, traffic on the route continued to grow by 5.9% but the latest figures show a decline in traffic volumes, though passenger numbers remain above the traffic levels of 2007. Latest capacity data shows that Virgin Blue and Qantas appear to have made significant reductions on the route in recent months.

Chart: Adelaide - Melbourne weekly flights - Weekly departures by airline
Source: OAG Max Online

Compared with February, Qantas has cut weekly capacity on the route by 27% while Virgin Blue has chopped the number of weekly seats by one-third.


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