Understanding the Australian Airline Market: A Data-Driven Approach

Brief Points:

• 5.5% GDP: Australia's airports are major economic drivers.
• Qantas Dominance: 522,252 flights from '03-'22. Who's challenging?
• New Zealand vs. Qantas: Diverse route strategies.
• Service Hubs: They dictate airline dominance. Surprised?
• Melbourne to Denpasar: Massive growth in two decades.
• Pandemic Impact: Stagnation, then a dip. But we see recovery!
• Future Hubs: Denpasar? Dubai? Ho Chi Minh? Manilla? Stay tuned.

Introduction:

The airport industry plays a major role in the Australian economy, contributing 5.5% of the GDP and providing 176,000 jobs, as per the [IATA report](https://www.iata.org/en/iata-repository/publications/economic-reports/australia--value-of-aviation/). But beyond these numbers, there are underlying operational strategies and decisions that can intrigue any aviation enthusiast or frequent flyer. Recently, I stumbled upon a thought-provoking post by Annie Nelson that pondered if airlines, amidst their operational challenges, are intentionally maneuvering certain disruptions to their benefit.

After reading Annie Nelson 's insightful post about whether airlines intentionally maneuver certain disruptions to their benefit, I want to discover what data-driven insights could be found in publicly available data. I found the following dataset on Kaggle that would provide me with data-driven insights.

The Importance of Data in the Airline Industry:

Data can help airline industries in the following ways.

• Revenue management
• Route Data
• In flight sales and food supply estimation
• Helps in predictive maintenance
• Helps in risk management
• Efficient forecasting

https://www.flightapi.io/blog/data-analytics-in-the-airline-industry/#How_Data_Analytics_is_Revolutionizing_the_Airline_Industry

Key insights from the analysis:

The scale of the Airline Market in Australia:

• Based on the data analyzed, 90 airlines are serving Australia and over 1260 unique routes. The total flights and number of seats from 2003 to 2023 were 2726653 and 727547292.

Dominant Players in the Market:

Qantas Airlines is the most dominant airline, with 522252 flights between 2003 and 2022. Its closest competitor Air New Zealand only 237272 flights

With Qantas Airlines being so overwhelmingly dominant in the market, there might be room for competitors to move in and act as competition to Qantas Airlines. Some of these competitors could be Jetstar, Virgin Australia, and Emirates.

Identifying Flight Frequencies:

Another factor that needs to be considered is each Airline's flight frequency.

As seen from the above graph, Qantas is still dominant in flight frequency, but there may be an opportunity for Air New Zealand to take over shorter flights where Qantas Airlines may be less dominant.

An interesting observation found in the analyses is that there are no overlapping destinations between Air New Zealand and Qantas. Air New Zealand has carved out its niche in more local destinations such as Papeete, Auckland, Christchurch, Nadi, Rarotonga, Wellington, Dunedin, and Hamilton. In contrast, Qantas Airlines do not dominate any destination.

Most dominant airline in terms of destination:

At first, finding the most dominant airline based on destinations seemed easy, but as seen from the graph. The most dominant destination for each airline is actually where the airline's planes are being serviced.

This meant that the airline's service country had to be excluded to find out which destinations the airline dominates.

Growth in routes between 2003 to 2022:

The routes which have shown the most growth were analyzed.

Firstly, the routes that have grown the most in the past 19 years were analyzed.

As can be seen, the most growth in flights was between Melbourne and Denpasar.

Analysis was also done on which route had the largest growth percentage over the last 19 years.

As can be seen from the graph, the routes that have grown the most and have the largest percentage of growth are not the same. The reason for this will have to be further explored.

Growth in overall traffic between 2004 and 2022:

The graph is only from 2004 to 2022 because only the last 3 months of 2003 were included in the data.

The graph clearly shows a time of almost stagnation in the airline market, and then it dropped greatly during the Covid pandemic. From the graph, their airline market is steadily growing again, which can bring new opportunities.

Conclusion:

The Australian airline industry had a nearly stagnant stage between 2006 to 2020. This is a great time for any airline to look for new opportunities for growth in the industry. Some destinations that can be looked at are Denpasar, Dubai, Ho Chi Minh, and Manilla. Further insights could be gleaned if data regarding each airline's ticket sales between 2003 and 2022 were available.

The analysis was done with the following tools Python using pandas,numpy,matplot, and seaborn. Google Sheets was also used for the graphs.

Thank you for reading through my project. Please feel free to reach out to me if you have any further questions about the data or analysis. I welcome any feedback you may have.

To see more of my work, please check out the featured section of my profile!

https://www.dhirubhai.net/in/niel-de-kock/