When it comes to travel between the United States and Australia, the Australian company Qantas Airways dominates the market. It has long operated a route between Sydney and Los Angeles, and last year began offering flights between Melbourne and Los Angeles, and between Dallas and Sydney. In fact, the Dallas-Sydney route now claims the title for the longest distance regularly-scheduled flight to depart from the US. The 7,500 mile trans-Pacific flight, a nearly 15 hour trek, unseated the Atlanta-to-Johannesburg route for the top spot. There is also speculation that Qantas will begin offering a seasonal San Francisco-Sydney route.
Qantas’ major rivals—Virgin Australia Holdings and Delta Air Lines, who are alliance partners—have a combined 25% market share on international routes with the US. Qantas maintains a dominant position, holding 54% of the market share. The entire Australian airliner industry fell into tough times following the global financial crisis, but Qantas returned to profit in 2014, and is now looking at further growth opportunities.
Many expect their position to only improve. One reason is the fall of the Australian dollar, especially against the US dollar. A recent report by Moody’s Investors Service suggested that this would further boost their position, as tickets sold for flights from the US to Australia would translate into more $US revenue, and would also provide incentive for foreign airliners not to lower their fares. This all combines for an improved competitive position.
The falling Australian dollar also has the potential to increase the popularity of Australia for American tourists, as the US dollar currently has stronger purchasing power in Australia. Some have feared a decreasing popularity of the US as a destination for Australian visitors due to the shift in purchasing power, but so far this has not been the case. Tourism rates from Australia to the US have yet to see a marked decline.
Regardless of the currency situation, strong mutual interest among citizens of both countries, high levels of economic cooperation, and historical connections, all keep visitors flowing in both directions. In 2014, US-Australia two-way tourism exceeded 1.6 million people and was valued at almost $9.5 billion. That year, over 1 million Australians visited the US, and nearly 500,000 Americans traveled to Australia.
Chad Westra is a Research Intern at the East-West Center in Washington and an undergraduate student at Calvin College.