The recovery of international air travel to and from Australia since the COVID-19 pandemic has been characterised by cautious approaches from both Australian and foreign carriers. Extended border closures combined with challenges returning aircraft to service have plagued airlines across the world. In the year to February 2023, data from our Analytic Flying Capacity Tracker shows international seat capacity to Australia was 11% lower than its pre-pandemic baseline. While Qantas’s capacity was 13% lower, many of the largest foreign carriers in the Australian market experienced even larger declines (e.g. Emirates down 18%, Singapore down 15%, and Cathay Pacific down 33%).
One exception has been the Australia - United States market where all US carriers have returned all of their pre-pandemic capacity and then some! Combined seat capacity by US carriers surged 29% over their pre-pandemic baseline while capacity by Australian carriers plummeted by 46%! The most prominent growth has come from United Airlines who have increased capacity on Australia routes dramatically, providing 60% more seats compared to their pre-pandemic baseline.
Following the recent publication of United’s financial results, an article on Cranky Flier highlighted the poor performance of United’s Australian routes over the Christmas and New Year period, with load factors plummeting alongside seasonal capacity increases.
We’ve opined on the Australia-US (and New Zealand-US) market on social media in recent months, arguing that Australian and New Zealand carriers face different headwinds compared to their US counterparts, affected by differing macroeconomic conditions, markets, and geopolitical consideration.
We wanted to follow-up and explore the Australia-US market in more detail, exploring why US carriers are liberally adding capacity to Australia while their Australian counterparts appear very cautious returning capacity to one of their largest and profitable markets. Our apologies in advance for the length and detail of the analysis - it’s worth it!