More business travel wanted on Australia’s busiest route, Melbourne-Sydney

Sydney, Australia - January 17, 2019: Qantas and Jetstar aircraft's tail at Sydney Kingsford Smith International airport tarmac.

Considered a flagship flight for many years, the Melbourne-Sydney route is bouncing back to pre-pandemic figures but airlines will be hoping for business travel to continue to grow through the new year.

It is easy to understand why flights between two of the nations biggest business hubs are hot competition for carriers. Melbourne-Sydney saw 6.99 million seats sold in 2022, the sixth busiest route in the world in a year that Victoria’s capital was still very much in the shadows of some of the worlds harshest COVID lockdowns.

In January this year Melbourne-Sydney ranked fifth in the world for the most flown route. Leading the way was Jeju International-Seoul Gimpo with nearly 1.2 million travellers. Sapporo-Tokyo Haneda was second, followed by Hanoi-Ho Chi Minh City and Fukuoka-Tokyo Haneda, Melbourne to Sydney saw 702,744 fly in January alone.

Tokyo Haneda Airport. (iStock – yongyuan)

In 1990 Australia put at end to the ‘two airline policy’ which effectively handed a duopoly on domestic routes to Qantas and Ansett airlines. Still in 2023 there are two main players, Qantas which holds a 38 per cent share of the domestic market, 61 per cent if you include its subsidiary, Jetstar and Virgin, who take the place of Ansett in the modern day with 33.7 per cent.

Quick calculations of January’s 702,744 seats between Melbourne and Sydney indicate that Qantas’ 38 per cent shares would be just shy of $40 million revenue on an average ticket price of $150. However, the busy times are about to come to a close and airlines will be hoping the clients in suits are boarding their planes rather than signing on to a zoom call to meet interstate partners.

The answer for airlines to keep the money ticking over is somewhat our of their hands. Pandemic times meant many business had to adapt to continue on with their operations and for many, that meant online strategies like Zoom and Microsoft teams. Another factor is the higher airfares, even in the domestic market where a flight can cost upwards of $200 each way for a one day trip means it often is a hard chose face to face over virtual options.

There is a light at the end of the tunnel, the Australian Competition and Consumer Commission (ACCC) recently stated they expect to see domestic fares even out as airlines regain the ability to meet demand. Three Australian city’s have also been revealed as in the top 10 searches for Air BnB users, indicating that although business travel is yet to return to full capacity, perhaps tourism may pick up the slack for the time to come.

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