Cairns international traffic on the upswing positively impacting visitor nights and the local economy

26 April, 2017

Cairns is enjoying a surge in international traffic following the launch of services over the last two years by four new foreign airlines. This increase is having a positive effect on the local economy and greatly impacting visitor nights for the area.

Cairns Airport's international traffic increased by 18% in 2016 to 642,000 passengers. International traffic was also up by 18% in 2015 but contracted in 2012, 2013 and 2014. According to Tourism Research Australia data, from 2012 there has also been a steady increase in international visitor nights for Cairns, in 2016 reaching just under 5,000,000.

Cairns Airport international passenger traffic: 2008 to 2016

Source: Cairns Airport and airport reports

Cairns is currently served by six foreign airlines - Air New Zealand, Air Niuigni, Cathay Pacific, Hong Kong Airlines, Philippine Airlines (PAL) and SilkAir. Three of these airlines have been serving Cairns for less than two years. SilkAir began serving Cairns in late May-2015, PAL in early Dec-2015 and Hong Kong Express in mid Jan-2016.

Korean Air LCC subsidiary Jin Air also launched a new seasonal twice weekly service to Cairns in mid Dec-2016 using 777-200s. The Cairns-Seoul route is currently not operating as the last of 16 return flights spread over eight weeks was operated in mid Feb-2017. SilkAir, PAL and Hong Kong Express have all been serving Cairns year-round.

SilkAir has enabled Cairns to restore a link with Singapore, a route last served over a decade ago by defunct Qantas subsidiary Australian Airlines. SilkAir has added capacity to Cairns since entering the market, an indication the route is performing well.

In the first year of serving Cairns, SilkAir combined Cairns and Darwin with a circle routing. The Singapore Airlines Group full service regional subsidiary decoupled Cairns and Darwin in late May-2016, when it began operating three nonstop weekly 737-800 flights to and from Cairns. SilkAir is adding a fourth weekly frequency on Singapore-Cairns in early Jun-2017 and will operate a seasonal fifth frequency in Jul-2017 and Aug-2017.

Hong Kong Express also has added capacity to Cairns since it entered the market with an initial three weekly flights on a Hong Kong-Gold Coast-Cairns-Hong Kong routing. The LCC operated several extra flights in Dec-2016, Jan-2017 and Feb-2017 for the peak Christmas and Chinese New Year holiday seasons. Hong Kong Express is currently at a thrice weekly schedule but is increasing Hong Kong-Gold Coast-Cairns-Hong Kong to five weekly frequencies from Jul-2017.

Hong Kong Express has provided Cairns passengers with a second option to Hong Kong after Cathay Pacific, which currently operates four weekly flights on a Hong Kong-Cairns-Brisbane-Cairns-Hong Kong routing. Hong Kong is Cairn's only international destinations served year-round by more than one airline. Both Cathay Pacific and Hong Kong Express use A330-300s on their Cairns flights.

PAL serves the Cairns market with a Manila-Cairns-Auckland-Cairns-Manila- service. It has maintained four weekly flights on this route since launching it in late 2015. PAL is the only year-round competitor in the Cairns-Auckland market as Air New Zealand serves the route seasonally for the southern winter season (typically from late March to early October).

Air Niugini has been the only airline operating between Cairns and Port Moresby since Oct-2016, when Qantas dropped the route. Air Niugini nearly doubled capacity to Cairns as Qantas pulled out, resulting in no overall reduction in capacity in the Cairns-Papua New Guinea market.

Jetstar is now the only Australian airline with international services from Cairns. It currently operates daily 787-8 flights from Cairns to both Osaka Kansai and Tokyo Narita as well as four weekly A320 flights to Bali. Jetstar is by far the largest international airline in the Cairns market, currently accounting for slightly over half of the airport's total international seat capacity.

While Cairns has clearly benefitted from four new foreign airlines it has been set back by the withdrawal of other airlines - although the impact on overall traffic from the withdrawals has been much less than the impact from the new services.

United Airlines suspended services to Cairns in Sep-2015. United served Cairns from Guam with two weekly 737 flights using its Micronesia subsidiary (formerly known as Continental Micronesia).

Cairns for a few years also had a seasonal service from Shanghai from China Eastern. This service has not operated since Apr-2016.

Attracting Chinese airlines is clearly a high priority list for Cairns as it seeks to continue growing international traffic and tourism. New routes to mainland China could enable the Cairns Airport to reach 1 million international passengers.

In 2017, international passenger traffic should exceed 700,000 international passengers for the first time since 2011 and could reach 800,000 passengers as a result of the additional capacity on several of its existing international routes. In Jan-2017 Cairns reported a 27% jump in international traffic.