I wonder if Australia, and OOL has become too expensive for the inbound low cost leisure market?
Quite possibly. Trying to find reasonable accommodation on the Gold or Sunshine Coast for a fair price, even in off peak times, has become a unicorn post pandemic. I cannot fathom how they fill the thousands of rooms available per night with the current prices they charge. A regular of ours is now more than triple the price it was in 2020 with zero changes to what's on offer.
Another question is why does this seem to effect Queensland more than other states. Apart from the notable exception of VietJet, which has funding from the State of Victoria and Melbourne Airport, all other LCCs have long returned to (or have introduced) SYD/MEL and PER without the need for state funded incentives. Whereas the State of Queensland struggles and has to approach those LCCs themselves by drawing on their AAIF funds to get those LCCs to fly to Queensland.
I think in terms of MEL and SYD, there’s a few factors:
- Possible Incentives
- Queensland is too expensive vs SE Asia
MEL/SYD have always generated the most demand from SE Asia, airlines are naturally attracted to markets that have the most demand. LCC’s have actually generated more demand, D7 for example has managed to do this with their cheaper fares. Students for example can visit their family back home more often and their families can also visit them here. Lower income earners in SE Asia can now also afford to holiday in Australia, they also naturally gravitate towards SYD and MEL, especially if it’s their first time. The two cities are unique and offer experiences you can’t get in Asia. If they wanted a beach holiday, they can get that for much cheaper in Asia.
Considering the current LCC’s, MEL/SYD are the largest markets for Malaysia (D7), Thailand (XJ), Singapore (TR), Philippines (5J) and Vietnam (VJ). With a mixture of markets to consider like Business, VFR, Student, Leisure etc…
I’m pretty sure some, if not all receive incentives in one form or another, it’s a little naive to think otherwise.
I’d also like to point out that Thai AirAsia X couldn’t make BNE work, their CEO stated that they always wanted to serve MEL and SYD but didn’t have the traffic rights to do so.