Australia’s domestic market posted zero growth in passenger numbers in calendar 2014, as a sluggish economy, weak consumer confidence and a resources industry in transition dampened demand for air travel.
Figures from the Bureau of Infrastructure, Transport and Regional Economics (BITRE) showed there were 57.52 million domestic travellers in calendar 2014, broadly in line with the 57.54 million in the prior year.
The flat passenger growth was in line with the frugal approach the airlines have recently taken to capacity, with the number of available seats in the market falling 0.4 per cent in the year.
And load factors eased 0.2 percentage points to 76.3 per cent, the BITRE report said.
Further colour on the current state of the Australian domestic market was expected to come from the half-year results of both Virgin Australia and Qantas due out over the next two weeks.
While Virgin was scheduled to unveil its full 2014/15 first half financial performance on Thursday, the airline has already published its second quarter figures which showed a first half underlying profit before tax of $10.3 million amid some encouraging signs.
However, Virgin chief financial officer Sankar Narayan said market conditions were still sluggish.
“We are seeing some improvement in domestic trading conditions compared to the first quarter; however consumer sentiment has been relatively weak and international yield recovery has been constrained by continued pressure in the South East Asian and Europe/United Kingdom markets,” Narayan said in a statement on February 6.
Qantas, which was slated to hand down its first half figures on February 26, has flagged an underlying profit before tax of between $300-350 million and the airline’s best first half result since 2010.
The profitability of Australia’s two major airline groups should be boosted by lower fuel prices, as well as the fact that tighter control on capacity has also helped push fares higher.
BITRE’s monthly analysis of domestic airfares showed all ticket types – from best discount economy to business class – were up in February compared with the prior corresponding period.
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