Chart of the Week #5: Is Sydney's dominance as Australia's international gateway waning?

This week’s “chart of the week” looks at the relative popularity of international airports in Australia over the last 40 years! There are several dimensions to the chart and we couldn’t quite work out what the most interesting question was. But the headline was certainly the most provocative question …

We used BITRE data to estimate the annual number of international travellers (combining arriving and departing) for all Australian airports, presenting each airport’s share of the total and the aggregate annual volumes. BITRE report data on arriving or departing international travellers for 17 airports during this time. In some cases, airports have zero values in some years or have consistently low numbers. When combined the 13 smallest airports amount to a smaller share than any of the four largest airports. To simplify the chart we aggregated these as “other”.

The charts provide some interesting observations. Firstly, Sydney’s share has declined consistently from 53% of all international travellers in 1985 to 41% in 2023 (40% so far for 2024). Meanwhile, Melbourne’s share has consistently grown since the late 1990s after declining from 23% in 1985. From a relative low of 17% in the mid 1990s, it reversed course reaching 28% in 2023 and 2024.

Brisbane’s share grew quickly in the late 1980s and early 1990s but has shrunk somewhat in recent years. At 14% it is still significantly higher than the 9% of 1985. Perth has maintained a consistent 10% or 11% of the market throughout the last four decades. Other airports also grew in the late 1980s, reaching a peak of 10% in 1994 and declining slowly since, presently accounting for 6% of the market.

While market shares have varied, none of the variation is due to declines in the absolute number of international travellers. All of the four major airports, as well as other airports combined, have seen consistent increases in passengers numbers over the last 40 years. Thus, the variation in shares is due to the variation in growth rates over time.

Melbourne’s relative growth in market share has been due to its higher growth in passengers volumes - particularly since 2010 - as seen in the second chart which shows it catching up to Sydney and racing ahead of Brisbane. Other interesting “micro trends” include Brisbane growing more quickly than Perth throughout the 1980s and 1990s, before Perth began to play catch-up in the 2010s, whereafter Brisbane reopened the gap. Another interesting “micro trend” is how Melbourne raced ahead of Brisbane after the latter had caught up to Melbourne in the mid 1990s.

So what are driving these trends?

The purpose of the chart of the week isn’t to conduct a thorough analysis to answer questions, rather to share interesting charts to highlight historical trends and provoke discussion. However it’s always fun to speculate (not our usual approach) …

1. Economic and population growth: In 1985, Sydney had a larger population than Melbourne, with 3.4 and 3.0 million people, respectively. Both cities have grown significantly since with Melbourne growing more rapidly. At present, Melbourne leads Sydney with 5.3 to 5.2 million. While this is likely contributory it’s certainly not accounting for Sydney’s initial lead, or for all of Melbourne’s catching up.

2. Sydney slots and curfew: It’s possible that Sydney’s well-known capacity constraints have resulted in stronger growth at Melbourne. Greater availability of slots at Melbourne, with more time flexibility provides international carriers, as likely contributed to more rapid growth. This argument is strengthened by the more recent rapid growth at Melbourne as Sydney slots have become more scarce over time.

3. Liberalisation: The progressive liberalisation of air rights over time through expansion of bilateral air service agreements, open skies agreements and the single aviation market with New Zealand have affected trends.

4. Aircraft range: In the 1980s most long-haul flights took multiple stops due to limited aircraft range (and just how different airline networks were - see our interesting analysis on fifth freedom routes which delves into the history of this a little more). In that era, a flight from London to Melbourne or Sydney might also stop at Adelaide, Darwin and/or Perth) on the way. This has changed rapidly as longer range aircraft became the norm and global connecting hubs succeeded, leading to traffic being funnelled through major hubs, including Melbourne and Sydney.

Again, these are some speculative ideas and certainly not authoritative or comprehensive. Let us know what you think!

And just in case you missed last week’s “chart of the week” you can find it here: