- Mar 26, 2017
Haven't you watched Utopia....Firstly it'd be interesting to know what went into that $200m figure. $200m / 160k seats = $1250 input into the economy per seat which does seem like a lot for a brand new route of just 236km's.
Canberra is an odd market, in that the passenger mixed is skewed with those who live here travelling for work and not really adding to the local GRP, while leisure passengers do add to the GRP. If Rex can pick up a good share of the passenger market travelling to Canberra for weekends to the National Gallery exhibitions etc, then there would be a greater input into the local economy.Having a look at the master plan the airport apparently contributes a total of $5b to the GRP. Rex's new route seems quite impressive to be able to come in and pick up ~4% of that.
You also have to take into the account the Airport has a large business park (which doesn't require local ACT Government approvals being Commonwealth land), which also contributes more into the local economy that those pesky aircraft.
You have forgotten to add the "Canberra Tax" i.e. 'what the market can bear...' factor. A cashed up local workforce, well above the national average coupled with their travel budgets being connected to 'spending' budgets as compared to a business that has to consider the business value of the travel i.e. is it worth it? It would be interesting to find out what the fixed component of a flight is - what is the base cost just to fill a plane, take off, land and unload, without taking into account the flight time/distance?I wonder what it actually costs Qantas and Rex per seat on these SYD-CBR flights, I'd argue it almost seems as if rex is gouging given they're somehow able to operate MEL-OOL a ~2hr 1238km flight for $65 but the 50 minute 236km flight costs $99. One would think because it's being operated by a prop plane it'd be cheaper to operate as well.