Australia domestic market growth still around 2%; international traffic up 7% with China (+23%) and Japan (+13%) driving passenger growth

Beijing Capital starts Australia service in September 2016.

Beijing Capital Airlines became the newest Chinese carrier to serve Australia when it launched three times weekly flights on 29 September 2016 from Shenyang to Melbourne via Qingdao. The first return flight took place on 30 September.

Australia’s domestic air travel market is not exactly the world’s most dynamic. When we last looked at the market around a year ago domestic traffic had grown by 1.7% in the previous 12 months. Well, in the subsequent 12 months (to May 2017) it has grown 1.6%, to 59.2 million passengers. This modest growth on RPT (Regular Public Transport) services was achieved thanks to a 1.3 percentage point improvement in load factor, as available seats actually fell by 0.3%.

At a route level, of the top 10 domestic city pairs, eight reported growth according to the latest BITRE statistics. Leading the way was the Gold Coast-Melbourne route (+5.5%), followed by Hobart-Melbourne (+5.4%). The two routes showing a decline both involved Perth, with Sydney traffic down 1.2% and Melbourne demand falling by 3.1%. The busiest route, between Sydney and Melbourne, grew by 2.0% to 8.94 million passengers.

Among the top 50 routes the only one reporting double-digit growth was the Sydney to Ayers Rock connection, which saw demand jump 13.9% to 191,300 passengers. The route is served by both Jetstar Airways and Virgin Australia. The biggest drop was on the Perth-Karratha route where passenger numbers fell by 16.7% to 464,500. Routes in Western Australia have been hit by the downturn in the mining industry which is a key driver of demand in that region. Bars highlighted in red below indicate months where the domestic market witnessed a downturn in growth when compared to the same month the year before, with the last month to see a downturn in traffic being February this year. 

Australia traffic growth 2007-2017

Source: BITRE.

According to OAG data for July 2017, the leading carriers in the domestic market (by seat capacity) are Qantas (37.3%), Virgin Australia (29.9%), Jetstar Airways (20.2%), Tigerair Australia (7.2%) and Regional Express (3.2%). No other carrier has more than 1% of seat capacity. In terms of flights Qantas still leads with 36.6%, followed by Virgin Australia (24.8%), Jetstar Airways (13.8%), Regional Express (12.0%) and Tigerair Australia (5.1%). In addition Airnorth Regional (1.73%) and Hinterland Aviation (1.33%) both operate at least 1% of domestic flights.

International traffic to Australia up 6.8% in the year to end of April 2017

The country’s international air travel sector showed faster growth, up 6.8% to 38.3 million in the year ending April 2017. While the top 10 city pairs saw growth of just 2.3%, all other city pairs grew by 8.9%. Sydney-Auckland remained the busiest international route, with demand up 1.6% to almost 1.6 million passengers. Among the top 10 routes, the fastest-growing was Melbourne to Singapore (up 9.8%) while the fastest-shrinking was Sydney to Los Angeles (down 5.3%).

New Zealand remained the leading country market with just over seven million passengers (up 2.8%) followed by Singapore, UAE and the US, none of which grew by more than 3%. Among the top 10 country markets the fastest-growing were China (+23.0%), Japan (+13.7%), Malaysia (+10.6%) and Indonesia (+9.0%).

Among Australian airports Sydney leads the way with 15.4 million international passengers (up 6.9%), followed by Melbourne with 9.9 million (up 7.8%) and Brisbane with 5.5 million (up 4.5%). Perth reported almost 4% growth to 4.4 million, while Gold Coast reported 11% growth to just over 1.1 million passengers.

According to the latest BITRE figures for April 2017, Qantas has just 16.5% of the international market followed by Jetstar Airways (8.9%). Emirates is third with 8.3% followed by Singapore Airlines (7.9%) and Air New Zealand (6.7%). Compared with last April, AirAsia X has seen the biggest gain, growing its share of the market from 3.5% to 4.3%.

Air China launches Chengdu to Sydney Australia

On 11 November 2016 Air China launched non-stop service between Chengdu and Sydney. The 8,711-kilometre route is flown three times weekly by the Star Alliance carrier. This cake celebrated the first return flight on 12 November. Passenger numbers on routes between Australia and China have grown by 23% in the last 12 months.


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