Avalon Airport works to rebuild domestic network following suspension of Hobart

Avalon Airport is aiming to build up its domestic network following the upcoming suspension of services to Hobart.


Summary

  • Jetstar is suspending services on the Avalon-Hobart route on 24-Mar-2018, leaving Avalon Airport with only three routes – Adelaide, Gold Coast and Sydney;
  • Jetstar is adding capacity on Adelaide and Sydney to offset the suspension of Hobart but Avalon Airport believes it is underserved from both a number of routes and capacity perspective;
  • Avalon Airport estimates the market is large enough to support 1.4 million to 1.5 million domestic passengers compared to the 800,000 handled in 2017;
  • Avalon Airport is working to secure new services from both domestic and international airlines to complement Jetstar’s domestic operation and a new international flight from AirAsia X.

Avalon currently has 49 weekly domestic flights, including 36 from Sydney, seven from the Gold Coast, three from Adelaide and three from Hobart. All 49 flights are operated by Jetstar, which has been the only airline serving Avalon since 2016.

Jetstar is suspending services to Hobart on 24-Mar-2018. At the same time Sydney is being expanded to 38 weekly flights and Adelaide is being expanded to four weekly flights. As a result, total capacity at Avalon will be flat at 49 weekly flights.

While Avalon-Hobart struggled during off peak months, Avalon Airport believes there is sufficient demand for the route to be restored, potentially by another airline. “I’d like to see Hobart come back again,” Avalon Airport CEO Justin Giddings told CAPA TV on 1-Mar-2018.  “It was only three times a week, and it is sort of hard to make that work. You need at least a daily I think to really give people choice of being able to fly.”

Avalon Airport is also aiming to restore a link with Brisbane, which was dropped by Jetstar in 2014. The airport believes restoring service to Perth, which was dropped by Jetstar several years ago, is less likely.

A new link to Canberra is also high on Avalon’s target list. Mr Giddings said a regional airline is now looking at potentially launching a low frequency service from Avalon to Canberra. There is strong demand from several big national businesses which have headquarters in nearby Geelong for a service to Canberra. “They’re crying out for a Canberra service,” Mr Giddings said.

Domestic traffic at Avalon increased by 10% in 2017 despite flat capacity to 800,000 passengers. The airport believes high load factors indicate it can support more domestic services. Mr Giddings estimates the market is big enough to support 1.4 million to 1.5 million domestic passengers per annum.

Achieving such domestic growth will likely require securing a second airline as Jetstar is not keen at the moment to add capacity from Avalon. The airport is working on trying to woo back Tigerair Australia, which suspended services at Avalon in 2011. Tigerair Australia, which has since been taken over by Virgin Australia, could potentially compete with Jetstar on the core Avalon-Sydney route and launch new destinations such as Brisbane, Canberra and Hobart.

“We’re crying out for more flights. I’d love to see Tiger come back, I really would,” Mr Giddings said. “I think that Tiger in Melbourne is just sort of going okay, not really growing. I think that if they could pull that down to Avalon it would give them a little bit more profile. … It also would get them away from cannabilising their Virgin market, which is also probably under some pressure.”

Avalon also expects the new service from Kuala Lumpur by AirAsia X, which will launch later this year, to generate, 500,000 international passengers per annum.

In addition to domestic expansion, Avalon Airport believes over time it can attract several new international routes. Bali, Fiji, Hawaii, New Zealand and Thailand are at the top of its list. Bali and Thailand could be operated by affiliates of AirAsia X, while other foreign airlines could potentially serve the other markets. Avalon also aims to eventually attract a service from the Middle East, but this is a longer-term objective.

To read CAPA’s analysis on the new AirAsia X service and more about the potential new routes from Avalon, click here.