Domestic aviation
- Air traffic: According to the Bureau of Infrastructure, Transport and Regional Economics (BITRE) there were 5.09 million passengers carried on Australian domestic commercial aviation (including charter operations) in May 2018, an increase of 2.6 per cent on May 2017.
- Record airline passengers: A record 9.25 million passengers flew on the Sydney-Melbourne route in rolling annual terms in May. But the load factor on the route fell by 0.1 per cent to 85.0 per cent. A record 4.79 million passengers flew on the Sydney-Brisbane route in rolling annual terms in May. The load factor on the route was unchanged at 82.9 per cent.
Aviation activity data is important for airlines and hotels.
What does it all mean?
- Domestic tourism is highly competitive. There are so many choices for Aussies travelling at home. Demand for city, rural and beach holidays vary according to individual preferences.
- Anaemic wages growth isn’t acting as a handbrake on our desire to go on holiday or conduct business. In fact, improving job security may be encouraging us to take more overnight trips. Often spending on experiences like holidays is preferred to run-of-the-mill purchases. Particularly with our hip pockets being emptied by everyday bills.
- And Victoria is “on the move” as the “hot” travel destinations for Aussies in 2018. Recent research by Roy Morgan shows that 3.8 million surveyed Aussies intend to take a holiday in the Garden State over the next two years (up by 55,000). Air traffic is picking up in Australia’s boom city, Melbourne. Over the year to May, 2 million domestic passengers travelled through Melbourne’s domestic airport, up by around 2 per cent.
- And business conditions are strong. More business trips are being conducted, as evidenced by the record number of passengers travelling between our two largest business centres – Sydney and Melbourne.
- More travel means more revenue and larger profits for airlines, despite rising fuel costs. Qantas and Virgin Australia are reaping the rewards of a firm Aussie economy.
- And the strongest increase in passenger growth occurred on the Adelaide- Canberra route over the year to May, up 21.1 per cent. Perhaps the South Australian state election and the forthcoming Mayo by-election have something to do with the increase?
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What do the figures show?
Air traffic
- According to the Bureau of Infrastructure, Transport and Regional Economics (BITRE) there were 5.09 million passengers carried on Australian domestic commercial aviation (including charter operations) in May 2018, an increase of 2.6 per cent on May 2017. For the month of May 2018 there were 56,765 aircraft trips, a decrease of 1.4 per cent compared to May 2017.
- There were 4.87 million passengers carried on Regular Public Transport (RPT) flights in May 2018, an increase of 2.6 per cent on May 2017. For the year ending May 2018 there were 60.77 million RPT passengers, an increase of 2.6 per cent on the year ending May 2017.
- RPT revenue passenger kilometres (RPKs) performed were 5.60 billion for the month, up by 3.0 per cent compared with May 2017. Capacity, measured by available seat kilometres (ASKs), increased by 1.7 per cent compared with May 2017 to a total of 7.17 billion.
- With RPT passenger traffic increasing at faster rate than capacity, the industry wide load factor (RPKs/ASKs) increased from 77.1 per cent in May 2017 to 78.1 per cent in May 2018.
- For the month of May 2018, Melbourne-Sydney remained Australia’s busiest RPT route with 761,474 passengers, an increase of 1.5 per cent compared with May 2017. It was followed by Brisbane-Sydney with 397,312 passengers (up 2.9 per cent) and Brisbane-Melbourne with 277,345 passengers (up 2.0 per cent).
- For the month of May 2018, the largest percentage increase in RPT passenger numbers, compared to May 2017, was on the Adelaide-Canberra route (up 21.1 per cent). There were large increases on a number of other routes, including Broome-Perth (up 21.0 per cent), Kalgoorlie-Perth (up 17.1 per cent), Hamilton Island-Sydney (up 15.4 per cent), and Sunshine Coast-Sydney (up 13.0 per cent).
- Conversely, the Brisbane-Bundaberg route (down 9.5 per cent) suffered the largest decline in RPT passenger numbers over the year to May 2018. Large decreases also occurred on the Brisbane-Hobart (down 6.5 per cent), Armidale-Sydney (down 6.4 per cent) and Brisbane-Gladstone (down 5.5 per cent) routes.
- Sydney remained Australia’s busiest domestic airport with 2.21 million passenger movements in May, followed by Melbourne with 2.03 million passenger movements and Brisbane with 1.41 million passenger movements.
- Outside of the capital cities, there were 2.05 million domestic passenger movements through regional airports in May 2018, up 2.3 per cent from May 2017. Out of the top 50 regional airports, the strongest growth was at Whyalla airport (up 24.8 per cent), while the largest decrease was at Moranbah airport (down 19.4 per cent).
- Total cargo movements at Australian airports on domestic RPT flights were 41.4 thousand tonnes in May 2018, an increase of 0.3 per cent compared with May 2017.
What is the importance of the economic data?
- The Bureau of Infrastructure, Transport and Regional Economics (BITRE) releases data on domestic aviation each month. The data is useful in tracking consumer spending and airline performance.
What are the implications for interest rates and investors?
- The Aussie domestic economy is in good health. But cost of living pressures remain in a low wage growth environment.
- Experiences, such as holidays, take us away from the run-of-the-mill school drop-offs and work. And business is booming around the country.
- Airlines and tourist operators are benefiting from strong internal demand, but discount and business airfares are rising on the back of lifting jet fuel costs.
- CommSec expects official rates to remain stable until early 2019.