Transportation Deployment Casebook/2025/Domestic Australian Aviation

Domestic Australian Aviation

Domestic aviation is the dominant passenger transportation mode between major Australian cities and the second mode by passenger kilometres for domestic travel, behind the private car. It has existed for over 100 years and is now a mature form of transport, with over 59 million passenger boardings in 2024.

Sydney's Kingsford Smith Airport, the busiest Airport in Australia with 24 million domestic passenger movements in 2023/24

Technology

Domestic Aviation today consists of large narrow body aircraft, powered by twin jet engines and capable of transporting more than 150 passengers across Australia at 33,000 feet and 850km/hr. Initially, airlines operated small charter flights with planes flying at 90 miles per hour (150km/hr) Planes allow for distant cities to connect within hours. Infrastructure required airports that have to be built on land far from homes to minimise their noise impact, reducing cost of land acquisition compared to railways, but increase journey times and inconvenience as generally passengers will have to travel further to get to an airport compared to other modes of transportation. The main advantages of domestic aviation in Australia is the speed and service offering. Sydney is over 700km from both Brisbane and Melbourne, requiring long drives or train rides. Trains are frequent with many flights a day, compared to two daily trains. The main markets for domestic aviation in Australia are business flyers and domestic tourists.

Context

Dual guage track is utilised on the approach into Perth to allow the narrow gauge suburban rail to share the corridor with the transcontenintal Indian Pacific train.

Road transport is essential for intercity transport, especially considering the incompatible gauges between Australian States. Australia is a vast and low density country, posing transport issues related to long-distance travel. Towns could be days away from supplies and external help, with long distances between watering holes along the way. To foster economic growth and intercity connectivity, aviation was well positioned to gain a foothold in Australia post-World War One.

Invention

Australia was an early adopter of aviation, and had a number of pioneers, including Sir Charles Kingsford Smith. Among his accomplishments is the first trans-pacific flight with Charles Ulm . These early pioneers were flying in small wooden aircraft with steel tubing, capable of carrying up to a dozen passengers at about 150km/hr.

Sea planes

Sea planes were used on both domestic and international flights, providing services to a broader range of destinations and not requiring the construction of airfields before the first passengers arrive.

Jet Engines

Jet engines enabled longer ranges and higher speeds, improving the gap in speed and competitiveness between planes and ground based transportation.

Early Market Development

Australian aviation began with the establishment of Queensland And Northern Territory Aerial Services (QANTAS) in 1920 . The initial business operated charter flights, providing assistance during , the network grew to 2,380 by 1929 .

Early domestic air routes of Australia in 1925

Domestic aviation was disrupted during World War 2 but due to technological advances and Royal Australian Air Force trained pilots ushered in the jet age of aviation by the 1960s.

The Role of Policy

In the 1950s, Australia had two main airline operators. Government-owned Trans-Australia Airlines and privately owned Australian National Airways (ANA). ANA wasn’t performing well and the government settled on interventionist policies to protect the two companies and competition between them. This lead to increases in prices and eventually the Hawke Government commissioned the Independent Review of Economic Regulation of Domestic Aviation in 1985. The government decided to remove the two-airline restrictions in 1990. Privatisation delivered increased competition, lower fares and improved service quality. Patronage climbed to record levels, reaching 20 million passengers within two years, 30% more than pre-privatisation numbers.

Growth

The aviation industry grew after privatisation, with QANTAS being listed in 1995. Domestic Aviation continued to grow by millions every year during the 2000s, fuelled by the strong Australian economy, especially the mining sector. By 2013 the growth had started to settle around 60 million passengers per year, about three times the amount before privatisation 23 years ago.

Maturity

Aviation became the second mode by passenger kilometres in 1993, surpassing "other", mainly composed of light commercial vehicles.

Australian domestic travel by mode in billion passenger kilometres, from 1974 to 2023.

Modern Developments

The Australian Domestic Aviation Market has stagnated since 2013, with post-COVID19 recovery seemingly complete. Aviation as a mode for intercity travel has a large monopoly with car and rail remaining slow. Airports are continuing to work on customer experience with streamlined check-in and security processes.

Fuel efficiency has continually increased, helping to further drive down the cost of air fares. This is due in part to winglets, a revolutionary design change to planes that can allow for about 5% fuel savings. As planes are already travelling close to the sound barrier, it is very difficult to increase in-vehicle speeds. Airlines have instead focused on improving other aspects of the journey, including 48-hour check ins, more flexible fares and more destinations.

Future

Some increase in domestic aviation is expected with the opening of Western Sydney Airport. Aviation is currently unsustainable with planes burning fossil fuels. There is no clear alternative available currently, with high speed rail still a distant Australian dream. The near future of domestic aviation in Australia therefore is driven by incremental gains in sustainability, including fuel efficiencies, sustainable aviation fuels, and continued technological improvements such as in-flight wifi.

Quantitative

In the 40 years since 1984, Australia’s domestic aviation has grown to five times the 1984 figure – compared to population less than doubling over the same period. To model this growth, the following three-parameter logistic function has been estimated: S(t) = Smax/[1+exp(-b(t-ti)]

Variable	Definition	Value
S(t)	Predicted system in year t	~10,000,000 - ~100,000,000
K	Saturation level, aka Smax	107,700,000
b	Coefficient	0.073643401
t	Time (years)	1984-2030
ti	Inflection year S(ti)=1/2K	2011.4 (2012)
R2	Coefficient of Determination	0.953688

Australian Domestic Aviation Number of Passengers

The S-curve and the history of Australian domestic aviation closely match from 1984 until 2013, at which point the S-curve over-estimates the actual passengers. This is exacerbated when considering the drop and subsequent recovery post-COVID19, stagnating patronage since 2013. Comparing the final year of data available in 2024, there is now a discrepancy of 18 million passengers or 30%, suggesting the model’s K value of 108 million is overestimating the real maximum value which is closer to 60 million.

Year	Passengers carried	Predicted Passengers	Comments
1984	13,299,666	12,673,158	First record
1985	14,360,280	13,520,094	Independent Review of Economic Regulation of Domestic Aviation
1986	15,088,784	14,415,045
1987	15,875,026	15,359,574
1988	17,188,797	16,355,142
1989	12,935,552	17,403,079
1990	15,578,005	18,504,559	Deregulation of domestic aviation
1991	19,644,591	19,660,574
1992	20,698,976	20,871,909
1993	23,000,492	22,139,109	Aviation overtakes “other” to become second most by passenger kilometres, behind cars.
1994	26,148,179	23,462,456
1995	27,814,635	24,841,937	QANTAS is privatised
1996	29,026,332	26,277,225
1997	29,202,250	27,767,649
1998	29,449,378	29,312,176
1999	30,416,589	30,909,393
2000	32,671,498	32,557,494	Virgin Blue starts, a low-cost carrier
2001	32,631,010	34,254,273
2002	31,060,313	35,997,119
2003	33,979,683	37,783,023
2004	38,822,111	39,608,586
2005	41,556,077	41,470,037
2006	44,256,699	43,363,258
2007	47,195,672	45,283,813
2008	50,459,239	47,226,990
2009	50,450,430	49,187,839
2010	53,967,293	51,161,224
2011	54,324,589	53,141,876
2012	56,571,415	55,124,446
2013	57,567,613	57,103,564
2014	57,554,550	59,073,901
2015	57,555,121	61,030,218
2016	58,992,966	62,967,427
2017	59,995,658	64,880,642
2018	61,112,315	66,765,225
2019	61,389,589	68,616,828
2020	19,445,556	70,431,429	COVID-19
2021	23,550,958	72,205,361
2022	50,197,542	73,935,335
2023	57,273,525	75,618,455
2024	59,287,685	77,252,225	Last full year available
2025		78,834,555
2026		80,363,752
2027		81,838,512
2028		83,257,909
2029		84,621,371
2030		85,928,664