Australia’s jewel in the crown Melbourne-Sydney route, is starting to climb up the rankings but needs business travel to keep growing.
There are several routes around the world that are an airline’s ‘jewel in the crown,’ where profits from that one route prop up many other parts of the network. Two that readily come to mind are British Airways services between London Heathrow and New York John F. Kennedy and Qantas domestic flights between Melbourne and Sydney in Australia.
In 1990 Australia deregulated commercial aviation and ended the cozy two-airline duopoly that had shared domestic flights for decades. New entrants saw the east coast services, the so-called Golden Triangle of Melbourne-Sydney-Brisbane routes, as the holy grail to profits and a quick way to break into the market. What they didn’t see was how fiercely Qantas would protect its dominant market share and how easily Australia’s aviation pool would settle back down to having two major airlines, swapping out Ansett Australia for Virgin Blue.
The line in the sand
Looking into how the Australian domestic market operates, according to the latest figures from the Australian Competition and Consumer Commission, Qantas leads the market with a 38% market share. In effect, the Qantas Group controls around 61% of the market when its subsidiary Jetstar’s 23% share is included, which is the imaginary line in the sand that CEO Alan Joyce proclaims it will aggressively protect at all costs. Virgin Australia has around 33.7%, and Rex is at 5.3%.
Key to those new entrants’ ambitions was the route between the major business hubs of Melbourne (MEL) and Sydney (SYD), where corporate traffic flew five days a week, and business class seats were scarce. Before the pandemic grounded airlines, the Melbourne-Sydney route regularly filled a Top 5 spot on the World’s Busiest Domestic Airline routes, although usually well behind the South Korean services between Jeju International (CJU) and Seoul Gimpo (GMP). In 2019 Melbourne-Sydney had 9.96 million seats, while Jeju-Seoul had 17.42 million.
In its Busiest Routes 2022 report, schedules analyzer OAG lists the top 10 global domestic routes, measured by scheduled seats, for October 2021 to September 2022. The Jeju-Seoul Gimpo route was by far the world’s busiest, with 16.07 million seats, miles ahead of second-placed Sapporo (CTS) to Tokyo Haneda (HND) with 10.2 million seats. Melbourne – Sydney ranked in sixth spot, with 6.99 million seats, sandwiched between Jeddah-Riyadh in Saudi Arabia and Mumbai (BOM) – Delhi (DEL) in India.
Australian domestic is bouncing back
Photo: Ryan Fletcher | Shutterstock
With domestic traffic surging in Australia, albeit mainly for leisure traffic at the moment, Melbourne-Sydney is coming back, climbing to fifth place in OAG’s January analysis. The Top 5 busiest domestic routes and the number of seats were:
- Jeju International – Seoul Gimpo 1,189,398
- Sapporo – Tokyo Haneda 985,684
- Hanoi – Ho Chi Minh City 979,951
- Fukuoka – Tokyo Haneda 963,490
- Melbourne – Sydney 702,744
Nine of the world’s Top 10 domestic routes in January were in Asia, with the other being between Jeddah and Riyadh. Tokyo Haneda features on routes to Sapporo, Fukuoka and Okinawa Naha, and Japan is the only country with more than one route in the Top 10. In a sign of things to come, tenth on the list is China’s Beijing (PEK) – Shanghai Hongqiao (SHA), with 587,110 seats on offer.
How far Melbourne-Sydney progresses up the rankings depends heavily on corporate travel’s rebound, which is uncertain, to say the least. Leisure travel will quickly die down in February, and unless those seats are filled with suits, passenger load factors will drop, and airlines will cut capacity. That’s a challenge global aviation faces as it waits to see if Zoom really does take the place of face-to-face meetings in 2023.
Do you think business travel will rebound to 2019 levels? Let us know in the comments.