China eclipses New Zealand as largest tourism source market for Australia

It’s official, China has overtaken New Zealand to become Australia’s largest inbound visitor market for the first time. According to Australian Bureau of Statistics data, there were 1,390,000 Chinese visitors for the year ending Feb-2018, an increase of 13.2%. New Zealand arrivals were 1,360,000 over the same period.

China has been Australia’s most valuable inbound tourism market since 2011, with visitors spending AUD10.4 billion (USD8.1 billion) for the year ending Dec-2017.

Australia-China capacity increases by over 60% in three years

To support these impressive tourism numbers, ten airlines currently operate nonstop flights between Australia and China, compared to only five three years ago.

Total capacity in the Australia-China market has increased by over 60% over the past three years: from approximately 52,000 weekly return seats in Apr-2015 to approximately 84,000 weekly seats in Apr-2018.

Australia-China one-way weekly seat capacity: Sep-2011 to Apr-2018

Source: CAPA – Centre for Aviation & OAG

Chinese visitor numbers to Australia and year over year growth: 2009 to 2017

Source: CAPA – Centre for Aviation and Tourism Australia

Australia-China market attracts six new entrants in less than three years

Donghai Airlines recently announced that it will add a Shenzhen-Darwin service from May-2018, adding more than 35,000 seats p/a between Australia and China. Donghai will be the sixth airline in less than three years to launch services in the Australia-China market.

Xiamen Airlines and the Qantas subsidiary LCC Jetstar Airways launched Australia-China services in 4Q2015. Xiamen has since maintained a year-round presence in the market, whereas Jetstar suspended services to China in Sep-2016 and then resumed services in Dec-2017.

Beijing Capital Airlines launched services to Australia in 2016 and Tianjin Airlines entered the market in 2017. Both airlines have since operated year-round flights to Australia although, like all the Chinese competitors, they typically add capacity during peak periods.

Hainan Airlines suspended services to Australia in early 2012, then resumed seasonal services at the end of 2015 and began operating year-round in Sep-2016.

Australia-China market will have 38 nonstop routes in Jul-2018

There are currently 36 Australia-China routes with nonstop services, according to CAPA and OAG data. Sydney accounts for 17 of these routes, Melbourne 12, and Brisbane four. Darwin joins Adelaide and Perth with one year-round China route.

Shenzhen will be served from five points in Australia following the launch of services from Darwin. Shenzhen is currently connected with Brisbane, Cairns, Melbourne and Sydney. China Southern operate from Melbourne and Sydney to Shenzhen, and Hainan Airlines operates from Brisbane and Cairns to Shenzhen.

Guangzhou currently has the most connections to Australia among Chinese cities. The city has five destinations in Australia (Adelaide, Brisbane, Melbourne, Perth and Sydney), while Beijing and Shanghai each only have three (Brisbane, Melbourne and Sydney).

Guangzhou also has the most Australia-China capacity among all Chinese airports. Guangzhou will account for approximately 26% of total Australia-China capacity in Jun-2018, followed by Shanghai with 21%, Beijing with 13%, and Shenzhen with 7%. There are currently 17 airports in China with services to Australia but the other 13 airports each account for a 3% or smaller share of total Australia-China seat capacity.

Among the Australian airports, Sydney has the most Australia-China capacity with a 52% share. Darwin will be the smallest Australian airport by capacity share, accounting for a 1% share of total Australia-China capacity.

Australia-China capacity share (% of seats) by Australian airport: 4-Jun-2018 to 10-Jun-2018

Source: CAPA – Centre for Aviation & OAG