Consumers love airline competition

The substantial increases in domestic air travel recorded in recent months continue, according to statistics from Avstats, the Department of Transport's aviation monitoring unit. Avstats' November 2000 study of domestic airline activity shows that increased domestic competition from the entrance of Impulse Airlines and Virgin Blue continues to expand the market on routes where they operate. The Melbourne-Sydney, Brisbane-Sydney and Brisbane-Melbourne routes, saw passenger numbers rise 19.4 per cent, 37.6 per cent and 29.5 per cent respectively compared to a year earlier. The Melbourne-Perth route increased by 11.2 per cent and the Brisbane-Canberra round jumped 26.8 per cent. Total passenger numbers across Australia jumped 11.4 per cent to 2.439 million compared to November 1999.

These increases have been occurring since September with the arrival of the two new airlines and the extra travel associated with the Sydney Olympics. Now that the Olympics have come and gone and passenger numbers continue to grow, it appears greater competition and the cheaper fares it has brought has led to a long-term growth in the air travel market.

Telling evidence of the impact of competition is the traffic comparison on routes to Coolangatta and Brisbane. As described above, the biggest rises in traffic were on the Sydney-Brisbane and Melbourne-Brisbane routes. Meanwhile, Sydney-Coolangatta traffic dropped 8.9 per cent while Melbourne-Coolangatta traffic saw an 11.9 per cent slump. With both Virgin and Impulse flying in and out of Brisbane from these major interstate destinations and Coolongatta only serviced by Qantas and Ansett, the conclusion seems obvious.

Competition and the airfare war seems to be prompting Australians to make more flights as the four airlines battle to win or preserve market share with a range of heavily discounted fares. So far, the consumer has been the winner