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Melbourne and Sydney airports wage PR wars with strategic partnerships

Analysis

The recent history of Australia's two main airports - Melbourne and Sydney - has been one of Melbourne being on the offensive to capture traffic that went to Sydney by default while Sydney sat back, even as its growth lagged that of its competitor. But that is no more. A revitalised Sydney airport, with the backing of a new government, is out to hold its place. That was evident at last week's annual Routes Asia forum where both Melbourne and Sydney took the opportunity to announce respective strategic partnerships to drum up support.

Summary
  • Melbourne and Sydney airports are engaged in a competition to capture more traffic.
  • Melbourne Airport has partnered with Chengdu Airport in China to attract air services and potential routes.
  • Sydney Airport has partnered with Delhi Airport to explore direct flights between Australia and India.
  • Sichuan Airlines has expressed intentions to serve Melbourne and Sydney, potentially affected by the Melbourne-Chengdu partnership.
  • Air India has plans to link Australia with India, likely starting with Delhi-Melbourne and Sydney routes.
  • Sydney Airport is set to become the country's largest hub for low-cost, long-haul services, giving it an advantage over Melbourne.

Melbourne Airport announced a partnership with Chengdu Airport in central/western China, a region the Chinese Government has turned its focus to for air services. It is also the home of Sichuan Airlines, which has announced intentions to serve Melbourne. Meanwhile, Sydney Airport announced a partnership with Delhi Airport to highlight the possibility of direct Australia-India flights and to cooperate on growing the market. In both cases, celebrations were clear, but less evident were benefits.

Sichuan in Dec-2011 disclosed its intentions to serve Melbourne, as well as Vancouver. Sichuan initially planned an Apr-2012 start date for Vancouver, which has now moved to Jun-2012 with schedules loaded this week. The carrier last targeted a Melbourne service commencement between Aug-2012 and Sep-2012. A network map also indicated a Sydney service was on the cards. With the carrier intending to serve Melbourne before the Melbourne-Chengdu airport partnership was announced, the partnership should affect little, except, perhaps, keep Sichuan away from Sydney - for now.

See related article: Sichuan Airlines expanding network from Chengdu with Australia, Europe & North America routes

Sydney's agreement with Delhi was also somewhat signed after the facts, with Air India intending for a number of years now to link Australia with India, likely Delhi. (Political and 787 delays have caused the plan to be set back.) Air India had announced a Delhi-Melbourne service, with Sydney to follow, but in recent months has spoken of serving Sydney before Melbourne. The most likely solution - and one that should not be affected by the Sydney-Delhi partnership - would be to serve both points on a triangular routing in which the inbound service arrives at Melbourne and continues to Sydney before returning to India.

This is one, small, part in the new competition between Melbourne and Sydney. The tide has been turning in Sydney's favour, with the airport in a matter of months to catapult as the country's largest hub for low-cost, long-haul service - although AirAsia X was always a matter of time and Melbourne's concentration of services with Sydney's lack made Sydney appealing, factors less to do with the airports than market dynamics.

See related articles:

Before Sydney's recent fortunes Melbourne had outpaced Sydney for passenger growth and market share change.

Melbourne and Sydney international passenger growth: FY2007 to FY2011

Melbourne and Sydney market share (change year-on-year) ending 31-May-2011

While some developments may be small, the bigger picture of burgeoning competitiveness is notable - and beneficial.

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