Melbourne Airport Nears 100% Recovery As Asia Demand Soars

Australia’s airports have come alive with a plethora of new and resumed routes, new airlines and aircraft types drawing crowds back into terminals that were ghost towns not long ago. For the last two years, Melbourne Airport has steadily added airlines and passengers, and that took off over the last twelve months as major Asian markets fully opened and passengers returned in their droves.

A year of success

In the twelve months ended June 30, 2024 (FY24), Melbourne Airport (MEL) handled 35.1 million passengers, 14% more than the 30.8 million in FY23. In FY 24, the airport handled 11 million international and 24.1 million domestic passengers, representing growth rates of 33% and 7%, respectively.

Photo: Komenton | Shutterstock

Compared to the pre-pandemic 2018/2019 financial year (FY19), international traffic recovered to 96% and domestic traffic to 93%, the latter reflecting the stagnant state of Australia’s domestic market. The total traffic through the airport in FY24 reached 94% of FY19 levels, while in June, that recovery rate had increased to 97%, although international passengers were at 102%.

Photo: Markus Mainka | Shutterstock

Melbourne Airport has been particularly effective in rebuilding its international connections, which involved a combination of resuming services from major airlines as well as building new routes with new partners. It was quick to regain capacity from the major Chinese carriers, such as China Eastern Airlines, which is now operating 30% more flights than before COVID.

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A third runway for MEL

Overall, the Chinese market has recovered to 92% of pre-pandemic levels while new services between Australia and Vietnam, sparked by the aggressive arrival of low-cost carrier Vietjet, and India have added more spice to the market.

CEO Lorrie Argus said the past year has been one of steady growth, with the introduction of new airlines, routes, and more capacity for travelers.

“We became the first capital city airport in the nation to exceed pre-pandemic international capacity and we have seen huge growth in markets such as Vietnam and India thanks to liberalised bilateral agreements allowing existing airlines to expand operations while also enabling new airlines to enter the market.”

Photo: Seven43 | Shutterstock

Melbourne Airport and its management team played a very significant role in enticing Turkish Airlines to commence its services from Istanbul to Australia in Melbourne. The airline played a long and strategic game to get additional air rights to eventually fly daily nonstop services to Melbourne and Sydney, a prime example of what Argus mentions above.

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Melbourne Airport has broken a six-year-old record for international passengers and was helped along by the arrival of Turkish Airlines flights.

By 2042, the airport expects passenger numbers to more than double to 76 million, and to meet that demand, it is already plowing through a raft of capital-intensive projects. These include upgrading terminals and baggage systems, improving infrastructure and hopefully gaining support from the state government for the long-awaited rail link to the Melbourne CBD.

With double the passengers comes significantly more aircraft movements, and to handle that, the curfew-free airport is planning a third runway parallel to the main north-south runway. The extra runway will allow for simultaneous take-offs and landings and provide the capacity needed, with the AU$3 billion ($2b) project now awaiting Federal Government approval.