Australia's Melbourne Airport is riding the wave of post-Covid recovery and is rapidly closing in on full recovery to pre-pandemic passenger levels. In July, the airport handled more than 2.9 million passengers, the highest recorded since the pandemic grounded aviation in Australia.

Numbers keep increasing at MEL.

Last month overall passenger numbers reached 90% of July 2019, with international traffic at 92% and domestic at 90%. During July, Melbourne Airport (MEL) handled 918,700 international and 2 million international passengers, a growth of 16% compared to the 2.52 million it handled in July last year.

Around 55% of international traffic came from arrivals as the winter school holiday period ended and overseas students returned to Melbourne. The top countries for non-Australian passport holders were China, New Zealand, India, the United Kingdom and Vietnam. Demand for travel between Melbourne and Vietnam is so great that four carriers, Vietnam Airlines, Vietjet, Bamboo Airways and Jetstar, operate services on the route.

Photo: Vietjet

The return of major carriers from Asia and beyond has been a big boost for international traffic, and with airfares reaching unsustainable levels, they have injected some welcome competition into the market. However, Melbourne Airport CEO Lorie Argus believes much more needs to be done to stimulate international competition and increase options for travelers and exporters.

Last week she called for changes in air service agreements to allow more airlines to service Melbourne and Australia, adding:

"We believe there is significant potential for improved access to Australia, and Melbourne in particular, through Asia-Pacific and the Middle East. Liberalising the Bilateral Air Service Agreements process through an open skies approach would provide airlines with certainty and help improve viability."

Why is competition being stifled?

While no mention is made of any particular airline or route, there have been recent examples affecting Melbourne that immediately spring to mind. The first is last month's rejection of Qatar Airways' request to add more services between Australia's main airports and Qatar, where it is currently limited to 28 return flights per week. The airline wanted to add an additional 21, but this was rejected, even though no Australian carrier has expressed any desire to fly on the routes.

Photo: Suparat Chairatprasert I Shutterstock.

Melbourne Airport, along with its Sydney counterpart, has for some time been in deep discussions with Turkish Airlines about flights from Istanbul. Turkish Airlines has made known its desire to launch the route which would initially be via an Asian port but become a nonstop when the airline has an aircraft that can deliver the loads needed to make it profitable.

In July, Turkish Airlines' Chairman Dr. Ahmet Bolat, was in Melbourne to meet with various stakeholders, including from the government and Melbourne Airport, but no firm commitments emerged from those discussions. In a one-on-one interview he told Simple Flying that the airline ultimately wants to fly daily flights to both Melbourne and Sydney but there's a hurdle that needs government intervention for that to happen. He revealed:

"There is a legal issue at the government level because right now we have a seven [flight] weekly frequency in total from Australia without fifth freedom rights. We want to make sure that we really have 14 frequencies because in five or seven years we want to fly to both cities with the Turkish Airlines' quality service."

Photo: Vincenzo Pace I Simple Flying

Just in those two examples are thousands of seats potentially bringing visitors and freight into Melbourne and giving passengers far greater options for travel to the Middle East, Türkiye and beyond. Last Thursday the Australian Competition and Consumer Commission (ACCC), a government body, granted Qantas and Emirates authorization for their passenger and cargo cooperation agreement to continue until at least 2028.

The authorization covers networks between Australia and the UK/Europe, New Zealand, Asia, the Middle East and North Africa. In essence, it protects the two airlines from any anti-competitive legal issues arising from their partnership, including setting fares, schedules, capacity, routes, etc.

This begs the question of why is it an issue for two other overseas carriers launching services to Australia, particularly when demand is outstripping supply and airlines are raking in mega-profits. Once again, the traveling public misses out, just like the lack of access for new low-fare airlines at Sydney Airport.

What do you think about liberalizing air rights? Let us know in the comment section.