Sydney to Melbourne route generates the highest revenue in the world
Flying between Sydney and Melbourne is generating more revenue than any other route in the world – almost double the level before the COVID-19 pandemic – despite a fall in the number of passengers travelling.
The route generated revenue of $US1.21 billion ($1.9 billion) in the first six months of this year, surpassing that from flights between New York’s John F. Kennedy airport and London’s Heathrow. That route was the most revenue-rich, followed by travel between Los Angeles and New York, in 2019.
In the first half of that year, before the pandemic, airlines generated $US611.5 million flying between Sydney and Melbourne, according to OAG, a data provider which is widely regarded as an industry standard. That would mean a 97 per cent rise in revenues between 2019 and 2023, despite a fall in passenger numbers of about 11 per cent between those periods.
Sydney Airport in September. Flights between Sydney and Melbourne are some of the most lucrative for airlines. Oscar Colman
The decline in passenger numbers – and a reduction in capacity of 7 per cent on the route – is one indication of how profitable it is for Australian carriers, in particular the largest, Qantas and Virgin Australia.
Qantas domestic earnings margins rose to a record 18 per cent in the year to June 30, up from 13 per cent in 2019, spurring its $2.47 billion profit. Virgin recorded its first profit in 11 years. But Qantas said last month it would raise airfares to offset higher fuel costs, which have crunched margins.
John Grant, the chief analyst at OAG, said there were ongoing issues in aviation supply chains, including problems with Pratt and Whitney engines which will keep more planes grounded and capacity below 2019 levels for the rest of the year.
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