Qantas axes Alice Springs-Melbourne route amid high cost, falling demand

Qantas will indefinitely suspend direct flights between Alice Springs and Melbourne while restricting its Darwin-Singapore route to the peak tourist season. The airline says the "difficult decision" was driven by rising costs and falling demand and has apologised to customers. What's next? Darwin-based aviation analyst Bruce Dale says residents "have to be realistic about the cost of flying airline services to the Territory". Qantas will suspend direct flights between Alice Springs and Melbourne indefinitely and restrict its Darwin-Singapore service to "peak periods", pausing the route between late October and June next year, citing "falling demand and rising costs". In a statement announcing the changes, the airline's domestic chief executive Markus Svensson said Alice Springs customers would still be able to fly to Melbourne via stopovers in Sydney and Adelaide. "Unfortunately we’ve had to make the difficult decision to indefinitely suspend our Alice Springs-Melbourne service and we apologise to customers," he said. “We know how much people value these direct connections, however falling demand and rising costs mean the service is no longer viable. “The same pressures have led us to reduce Darwin-Singapore flying to peak periods and we don’t take either decision lightly.” Mr Svensson said Qantas had "put one of our newest and most efficient aircraft" on the Alice Springs-Melbourne route six months ago but the move, along with sale prices as low as $199 one way, had failed to stimulate demand. "Unfortunately it has underperformed," he said. Instead, the airline will add a Saturday service between Alice Springs and Sydney, increasing the number of flights between the two locations from six days a week to seven. A billion-dollar-a-year business Darwin-based aviation analyst Bruce Dale said it was "very sad" to see the Alice Springs-Melbourne route cancelled after "many decades". "At the same time, the challenges of economic flying within the Territory effects all airlines, not just Qantas, so on that hand I can understand why Qantas would have made this difficult decision," he said. "They had reduced to a very modern fuel-efficient aircraft, the A220, which is smaller and better suited to the market — that normally helps — but unfortunately it might not have been enough to save the route." Mr Dale said while there might be room for governments to step in when routes became uneconomical for airlines, "we also have to be realistic about the cost of flying airline services to the Territory". "By my estimate, the cost of every single flight to and from the Territory, and the intra-territory services, cost the airlines about $1 billion a year — it's big business," he said. "So if you have flights going half full, it’s actually costing the airlines tens of thousands, potentially even a million dollars, over the course of a year. "So that balance between what is a reasonable expectation for a private enterprise to carry versus is there government support, and how much government support could actually make a difference, if we’re talking about a billion-dollar-a-year business." Mr Dale said he was "personally gutted" by Qantas's decision to restrict flights between Darwin and Singapore to the peak tourist season but other airlines were still flying the route year-round. "I've got family in the UK I need to care for, so I'm a semi-regular traveller on that flight, but again I understand the reasons why," he said. "The challenge of attracting visitors to the Territory in the low season is a perennial one and that will need a whole-of-territory response."