BITRE: Feb 2019 is third consecutive month of decline in domestic air travellers

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Melburnian1

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The monthly BITRE figures show that for the third consecutive month (February 2019), the number of RPT ('regular public transport') domestic air travellers decreased compared with the same months in 2018 (or 2017 for December).

In February the nationwide decrease was 0.7 per cent:

https://bitre.gov.au/publications/ongoing/files/Domestic_aviation_February_2019.pdf

I like February as a comparison month because of the absence of school and public holidays. 2018 and 2019's February had 28 days each, although Feb 2018 had 20 weekdays compared with Feb 2019's 19: perhaps the latter makes a little difference, but doesn't explain how some routes had huge decreases in passenger numbers.

The Melbourne - Sydney route, our busiest, was down marginally: 0.4 per cent.

Brisbane - Sydney had a large monthly drop of 3.3 per cent and Gold Coast - Sydney a bigger drop of 4.1 per cent, but the third busiest, Brisbane - Melbourne, was up 2.7 per cent.

Cairns to Sydney had a huge drop of 10.4 per cent. Was some of this weather (as in rain) related?

Brisbane, as well as Sydney, to Proserpine had mammoth declines in February 2019 compared with Feb 2018 of respectively 18.5 and 31.1 per cent. Did an airline like JQ or TT reduce flight frequencies, or again, was it partly due to adverse weather?

If I recall, nationwide population growth at present is tracking at around 1.7 per cent per annum (and mainland Chinese tourism to Australia is still doing well, although annual increases are not what they were, relevant in part because QF's Mr Joyce is on record stating that these tourists take an average of two to three flights ) so it's not a great news story for the airlines that passenger numbers are falling. As against that, JohnK keeps informing us how domestic airfares continue to rise: this was also shown recently by BITRE in a separate publication.

A minority of small and large businesses' air travel and a fair chunk of leisure air travel is discretionary. It's hard to know since one would have to get a market researcher to conduct interviews by text or phone across a wide population cross section, but if one in 100 travellers decides they can't afford to travel (or don't need to) and everyone else behaves travel-wise the same as they did for the applicable month a year ago, that more or less explains the decline.

Last night (17 April 2019) ABC '7.30 Report' led with a story re possible further house price declines. Its point was that this would increase the percentage of borrowers whose equity was negative, a problem apparently worst in WA/NT and then Queensland. No State however would be immune, and this negative sentiment (seen at present in Sydney and Melbourne as fewer homeowners/investors put properties up for sale) would spread.

In such a scenario, Australia's quasi-duopoly of airline groups might have to reduce fares to get posteriors on board (assuming they didn't want to reduce the number of flights, always possible but then they're left with high fixed costs such as aircraft leasing, staff and other overheads).
 
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Interesting @Melburnian1
Re SYD-MEL or in deference to your avatar, MEL-SYD routes, I note that QF has some J fares discounted which I did not see before.

Very much borne out by the BITRE survey, which compiles indices. The trend has been for Y and discounted Y fares to rise (especially the discount fares) but J to decline. I assume the latter is occurring with QF and also VA:

Domestic Air Fares
 
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Very much borne out by the BITRE survey, which compiles indices. The trend has been for Y and discounted Y fares to rise (especially the discount fares) but J to decline. I assume the latter is occurring with QF and also VA:

Domestic Air Fares
Thats what I am seeing. At least Y fares are stable, but J fares have been discounting quite a bit. $499 one way SYD-MEL//MEL-SYD rather than in recent past $750 (as an advance purchase)
 
Thats what I am seeing. At least Y fares are stable, but J fares have been discounting quite a bit. $499 one way SYD-MEL//MEL-SYD rather than in recent past $750 (as an advance purchase)

Quick, does this tell us that corporate and leeches (I mean governments) demand for J domestically is 'soft' or is it just a case of QF (or VA) having say two J class seats on some flights at A$499 one way SYD - MEL while the rest, if anyone wants them, command higher fares?
 
Quick, does this tell us that corporate and leeches (I mean governments) demand for J domestically is 'soft' or is it just a case of QF having say two J class seats on some flights at A$499 one way SYD - MEL while the rest, if anyone wants them, command higher fares?
Corporates and leeches have their corporate negotiated fares which is in a different fare bucket thank whats publicly available. So yes they travel on probably cheaper per seat fares than what you and I can find.
 
It will be interesting to see what happens in April, May and June.

In Victoria people with second properties have just been hit with a huge increase in Land Tax (mine went from $2700 to over $6000), and this comes on top of a big increase in council rates last year on all properties, including the family home. This is a big hit to retired people living on the income from those properties.

It's nice to know we're all richer, as evidenced by the new property valuations, but money is still being sucked out of discretionary spending - such as from our leisure operating budget.

Maybe it will eventually increase domestic travel as people choose to stay in Australia versus going overseas, or do the opposite as people choose to skip domestic vacations and in order to save for international vacations.
Regards,
Renato
 
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Melburnian1, what do the figures say about Melbourne? I noticed in the top 20 routes, all of those that had MEL (except MEL/SYD) saw increases (BNE, ADL, OOL, PER, HBA, CBR, LST) yet all routes in top 20 that has SYD (except SYD-HBA) saw declines. Election jitters for NSW? Or rebalancing of capacity away from SYD?
 
Melburnian1, what do the figures say about Melbourne? I noticed in the top 20 routes, all of those that had MEL (except MEL/SYD) saw increases (BNE, ADL, OOL, PER, HBA, CBR, LST) yet all routes in top 20 that has SYD (except SYD-HBA) saw declines. Election jitters for NSW? Or rebalancing of capacity away from SYD?

dajop, a very pertinent point. You are completely on the money in highlighting stronger growth (mostly) in the MEL routes compared to SYD.

It's been noticeable for many months that domestically, MEL has been narrowing the gap with SYD in relation to the number of passengers.

Most Australians like certainty and with the growing lack of political engagement, they definitely don't like elections (or compulsory voting). However, one wonders if the media hype this up, as trends in consumer spending tend to be ongoing and not just two months, say, before a State election (March in NSW). It's difficult to imagine as soon as Gladys B was reelected, prospective passengers suddenly rushing onto their smartphones and tablets and booking 10 domestic flights that they'd put off booking because of what the media says was 'uncertainty'.

Bear in mind there's an element of 'double counting' in the figures airports love to quote, as we can only (obviously) depart once from airport X on a one way (single) trip. Yet airports love to quote total passenger movements as in 'SYD caters for c,44 million passengers annually' rather than the truth which is that 'c22 million passengers depart from SYD each year.'

In the year to January 2019, MEL had a total of 25710067 domestic passenger movements, so roughly 12.85 million passengers departed from the airport.

SYD had 27661725, so roughly 13.85 million passengers left the airport on domestic flights.

However domestically, MEL's annual growth was 1.7 per cent and SYD's only 1.2. per cent, so MEL narrowed the gap by about 60,000 departing passengers.

With the increase in international tourists coming to Oz, many of whom fly (see below), and annual Oz population growth of about 1.7 per cent, this performance could be called anaemic. It's far from the vigorous growth we see in much of southeast Asia. There's a relatively small cohort of a few hundred thousand Australians such as you, dajop, who make many domestic flights a year but a far larger number who much to AFFers' amazement, do not ever, or only very rarely, fly.

Because Victoria is geographically the smallest mainland state, it has far fewer intrastate air routes, really only to ABX ('Twin Cities') and MQL from MEL, both of which face heavy competition from driving, NSWTrainLInk XPTs to Albury and V/Line rail to Wodonga and Albury plus V/Line rail to Swan Hill then coach to Mildura (plus an overnight road coach all the way Southern Cross to Mildura via Ballarat). I've been on all these trains/coaches numerous times with the three coaches a day Swan Hill to Mildura often fully booked.

In contrast, NSW has a large network of intrastate flights. Even though they don't carry many per trip (on exception is SYD - BNK that has had a large rise in passengers in the past decade and sees mainline type planes), the frequency adds up, and some routes have at least two operators, with VA's VARA signalling it'd like to operate more extensively, but at present it's hidebound by slot unavailability.

dajop, you're correct: this trend for the routes ex MEL to grow faster than SYD's is ongoing and will within 10-15 years if it continues see MEL as the largest domestic airport passenger number-wise.

Historically airlines like to go where yields are best, but domestically they can no longer ignore MEL (even though more finance individuals are still based in SYD, and they're among the passengers domestically who pay the highest median fares).

However it's still way behind SYD for international passenger movements: roughly 5.7 million depart from MEL at present annually (increasing at 8.8 per cent in the year to Jan 2019) versus roughly 8.4m departing internationally from SYD annually (rising at a still good 4.8 per cent, but below MEL's international growth percentage).

If QFi had more nonstop international flights from MEL, the gap would be narrower. But that's history!

What will be fascinating is whether there's a further contraction in the mainland communist Chinese economy and if so whether fewer of these tourists come to Oz (and elsewhere). AJ from QF has said that each one of these flies domestically on average two to three times.

I put MEL's greater growth in domestic passenger numbers down to stronger interstate and overseas immigration flows, which has led to many infrastructure problems in MEL, the east coast major city that still lacks a train to its airport. Victoria has also narrowed the tourism gap with NSW and Queensland, in part because more international tourists are coming south (and subsequently using domestic flights to depart), as well as the ongoing fascination of other Australians with Melbourne's laneways as trendy and its shopping as the perceived best in Australia. Online shopping hasn't completely destroyed the 'born to shop' mentality.
 
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There's a relatively small cohort of a few hundred thousand Australians such as you, dajop, who make many domestic flights a year but a far larger number who much to AFFers' amazement, do not ever, or only very rarely, fly.

One minor correction here, but the thrust of your point still stands. Haven't taken a domestic flight since Feb 2018 (and that was connecting from international) :p International is more my thing these days simply because of where I live ...
 
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