Air traffic a growth barrier for Victoria’s tourism industry

A Report in The Melbourne Age today by Jeremy Johnson, Chairman of the Victorian Tourism Industry Council, says that the while the AFL final highlighted the economic benefits visitors to Melbourne bring, with full hotels, crowded restaurants and bars and increased retail sales, the recent release of figures for international passenger arrivals in Melbourne, underlines the need for the Federal and State governments to do more to encourage extra direct flights to Melbourne.

Jeremy goes on to say that while Melbourne Airport has been a success story since its privatisation, it is fighting hard to grow market share, with from 1997-98 to 2005-06, Melbourne leading international passenger growth among all major Australian airports with annual growth of 6.8%, with Sydney on 3.6% and Brisbane on 5.6%.

He says that foreign airlines have been important to this success because they have delivered Melbourne’s international airline seat growth since 2000, while at the same time Qantas has reduced its overall group’s seats, including Qantas, Australian Airlines, Jetstar, since 2000 by 6.5% and Qantas specifically, the largest member of the Group by 17%.

Interestingly, during the same period, foreign carriers have added 30%.

New direct flights from non-Australian carriers have strengthened Melbourne as a tourism, event and investment destination, but the impetus is slowing, with Melbourne Airport’s international passenger numbers growing by only 2% over 2005-06, compared with Australian international passenger growth of 3.1%.

Jeremy says that in many respects, this is a seat supply issue, not a demand issue because demand as been stimulated by excellent tourism marketing.

The Victorian Tourism Industry Council believes several foreign airlines want to fly to Melbourne, either as newcomers or as providers of extra flights, but air-service agreements have not yet been reached between the Federal Government and their country of domicile, with direct flights important in attracting tourists, business travellers and corporate head offices, adding travellers want direct, same-plane international services to major business and leisure destinations.

Jeremy also said, that airline seat capacity is vital to international tourism growth, in major cities and regional areas, adding that quite simply, no matter how Victoria is promoted, if international visitors can’t get a direct flight here, they will go elsewhere.

Report by The Mole