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Australian domestic aviation continue to struggle in June 2020

Fixed wing charter only growth segment compared with a year earlier

Key points – All data and quotes directly sourced from BITRE. https://bit.ly/2YNPP6R

“Brisbane was Australia’s busiest domestic airport with 147.4 thousand passenger movements in June 2020 (down 89.3 per cent), followed by Sydney with 140.2 thousand passenger movements (down 93.3 per cent) and Melbourne with 122.8 thousand passenger movements (down 93.7 per cent).”

“Fixed-wing charter operators carried 252.0 thousand passengers in June 2020, an increase of 20.8 per cent on June 2019. Perth Airport accounted for 37.4 per cent of all charter passengers in Australia.”

Not only has available seat kilometers (ASKs) and the number of flights have fallen off the cliff in June 2020 compared with June 2019 (-90%), even the reduction in services haven’t been sufficient to stem the fall in load factors (LF) (down to 50% LF) – minimum service requirements (e.g. 2 daily for business routes) and airlines continuing to use the large 737-800s and A320s is likely to put downward pressure on profitability. This is despite a small increase in flights since April / May, and does not include the likely reduction in sales of more higher yielding fully flexible and business class fares, due to many companies restricting business travel, particularly for knowledge workers who are more likely to have meetings online.  Industries that cannot work from home, such as mining, are driving RPT and charter demand.  In addition, the introduction of COVID19 flexibility clauses by airlines to allow passengers to change flights without penalty would further reduce the demand of higher priced (and traditionally more flexible) fare classes in the non business segment.

The only improvement in LF are intrastate mining routes (Perth to Karratha, Port Hedland, Brisbane to Mackay), as well as winter sunseeker routes (Sydney to Ballina), but the improvement here is incremental, with Ballina showing the best improvement, from 79% to 86% (June 2019 vs June 2020)

Many regional cities remain unserved, including Sunshine Coast and Newcastle.

BITRE defines in their competitive route report, routes which have “an average exceeding 8 000 passengers per month over the previous six months where two or more airlines operate in competition.” In June 2020, “there were 24 such routes compared to 65 routes published in June 2019.”

The top city pairs in June 2020 by available seats compared with the same period last year are shown below:

City-Pair Jun 2019 Jun 2020 % Change
Melbourne - Sydney  858 963  93 352 -89.1
Brisbane - Sydney  469 409  52 231 -88.9
Brisbane - Melbourne  337 945  44 534 -86.8
Brisbane - Cairns  123 739  22 682 -81.7
Brisbane - Townsville  110 214  20 412 -81.5
Brisbane - Mackay  82 781  18 133 -78.1
Melbourne - Perth  189 831  29 262 -84.6
Perth - Sydney  157 079  22 814 -85.5
Brisbane - Rockhampton  55 035  13 332 -75.8
Adelaide - Melbourne  249 035  16 432 -93.4
Broome - Perth  38 366  8 987 -76.6
Karratha - Perth  57 627  10 318 -82.1
Perth - Port Hedland  49 430  9 862 -80.0
Canberra - Melbourne  142 004  11 514 -91.9
Ballina - Sydney  37 446  6 503 -82.6
Gold Coast - Sydney  248 400  7 824 -96.9
Kalgoorlie - Perth  42 861  7 158 -83.3
Newman - Perth  46 750  8 096 -82.7
Brisbane - Mount Isa  16 316  6 198 -62.0
Brisbane - Canberra  72 325  7 404 -89.8
Brisbane - Emerald  24 300  4 908 -79.8
Brisbane - Gladstone  30 756  4 172 -86.4
Brisbane - Proserpine  21 760  3 444 -84.2
Melbourne - Mildura  28 734  2 815 -90.2

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