India critical market for Melbourne Airport, has massive potential for direct connectivity: CEO Lorie Argus | Business News
Home to the largest population of the Indian diaspora in Australia, Melbourne is seeing a rapid growth in demand for direct air connectivity with India. Just in the past 12 months, direct flights between Melbourne and India have grown by over 300 per cent vis-à-vis the pre-pandemic period. Such is the demand that India is now the fastest-growing long-haul market for Melbourne Airport, its chief executive officer LORIE ARGUS tells SUKALP SHARMA in an interaction. With Air India and IndiGo working to significantly expand their fleets and networks, Argus expects them to enhance direct connectivity between India and Melbourne over the next few years. Edited excerpts:
How important is the Indian market for Melbourne Airport and how do you view the evidently growing demand for travel from Indian cities to Melbourne and even beyond in Australia?
India is critical for us. It is at the top of the list in terms of importance because it is our fastest-growing long-haul market. Melbourne Airport has grown direct services to India in the last 12 months by 330 per cent, and all those flights are going full. Even with the growth in direct connectivity to India, 70 per cent of the traffic between India and Australia still goes through connecting hubs like Singapore, and those hubs have really not suffered. This shows us that the demand is underserviced.
Overall, the India to Melbourne market (including flights via another country) has grown by 11 per cent, which is extraordinary when you think about markets like the UK, for example, that are still negative to what they were pre-COVID. So, while some markets have gone backwards, India has grown at double digits. The metrics are so strong and it shows you that India is going to be really successful for Melbourne and for Australia.
In all of Australia, Melbourne has the highest number of international Indian students, which means we also have their families and relatives visiting. Other high-demand segments include IT (information technology) and business.
From an airport’s perspective, does it really matter to you if there is a direct flight from India or are you agnostic to how the traffic is coming to you from India—whether direct or through a hub airport in another country?
It does matter. Point-to-point traffic is really important for us because Melbourne is not a hub and for some time now Melbourne has just been a bit out of reach for most long-haul carriers. But with new aircraft types with extended range, we are now seeing more direct long-haul services to cater to the significant demand in Melbourne. That is important to us because people prefer direct services. They will connect if they have to, but point-to-point service is the most critical for our customers. So, we want to serve what our customers want. And our customers are telling us that they want more direct services.
Turkish Airlines is a great example. There is a strong demand from the Turkish community in Melbourne for Turkish Airlines services. They are going through Singapore today — Melbourne-Singapore-Istanbul — but once their new aircraft arrive, they plan to operate direct flights.
Of course, we will always support the hub airports. But direct services can really stimulate demand with which we can really grow the market.
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Air India already has direct flights between Melbourne and India. Are you in discussions with the airline to increase flights? Also, with IndiGo planning wide body aircraft induction from 2027, have you started discussions with them?
Yes, absolutely. We are definitely talking to IndiGo as well as Air India. We spoke to Peter (IndiGo CEO Pieter Elbers) recently. IndiGo just announced their codeshare partnership with Qantas, which shows that they see the opportunity in Australia and I think most certainly we will see IndiGo flying to Australia with those new aircraft.
I would like to add that we are also the largest air cargo hub (in Australia). In the first quarter of this year, 40 per cent of all of the cargo went into Melbourne. So, for the airlines, it is not just a passenger opportunity but also a cargo opportunity.
What kind of indications have you received from Air India with regard to adding flights between Indian airports and Melbourne as the airline’s wide body fleet continues to expand?
We really want to see the Melbourne-Mumbai service go daily from thrice a week. We believe they will be able to increase it to five per week in the near future, and then hopefully seven days a week in the next 12 months. We would love to explore the opportunity of connecting with more Indian cities. We see that the opportunity to expand to more Indian cities is definitely there, apart from growing the ones we already have direct services to (Delhi and Mumbai).
Air India is working to develop Bengaluru as a hub in the southern part of India and has been adding long-haul flights from there. Are you actively looking at making Melbourne-Bengaluru direct flights a reality?
A hundred per cent. We have spoken with them (Air India) about Bangalore. So, Bangalore is already servicing Sydney and working with Qantas as well. What we see in Australia is that the dynamics of the market for Melbourne and Sydney are quite comparable. Usually if a service is successful in Sydney, it is going to be successful in Melbourne, and vice versa. We are really hopeful that within the next 12 months, we will see a direct service by Air India between Bangalore and Melbourne.
