Melbourne, Adelaide airports take international passengers from Sydney Airport

Sydney Airport is declining in importance as a gateway for international travel to and from Australia as a bigger proportion of people choose to fly through smaller cities, including Melbourne, Adelaide and the Gold Coast.

Only 40 per cent of all international passengers to Australia now fly through Sydney, down from 46 per cent a decade ago, according to a new report by Deloitte Access Economics prepared for the Australian Airports Association.

Brisbane Airport is also used by a lower proportion of international passengers, with 14 per cent choosing to travel through the Queensland airport in 2016-17 compared with 18 per cent a decade ago.

But the proportion of international passengers going through Melbourne Airport has risen to 26 per cent from 20 per cent a decade ago, while Adelaide and the Gold Coast have also increased market share.

The diversification away from Sydney comes as overall international passenger movements in Australia grew 34 per cent to 39 million in the five years to 2016-17, far outstripping growth in domestic passenger movements of 9 per cent to 118 million.

Mark Young, managing director of Adelaide Airport, said the airport worked closely with state tourism authorities to take a "Team South Australia" approach and strategically target new international routes.

"It's a very competitive marketplace and we are in direct open competition [with other airports] in respect to those international services," Mr Young said.

"In South Australia's case we are really playing into what we think is a rising demand for nature-based tourism, food and wine experiences and particularly the clean, healthy provenance of food."

The airport has added international services operated by Qatar Airways, China Southern Airlines and Fiji Airways since 2016, and wants to start direct flights to the US west coast and increase flights to China, its fastest-growing market.

About 40 per cent of the international travellers to and from Adelaide go via other airports in Australia, so the airport is trying to take advantage of smaller, more-fuel-efficient aircraft like the Boeing Dreamliner and Airbus A350 to increase the number of direct flights to overseas destinations, Mr Young said. "There is nothing that stimulates a market better than direct services."

Simon Gandy, chief of aviation at Melbourne Airport, said the airport marketed Melbourne's big sporting and cultural events and multicultural population as well as its expanding infrastructure – such as a planned third runway – when negotiating with airlines.

"We know that we are in a competitive marketplace and we know that airlines, when they look at their available aircraft and where they need to fly them, are going to be looking for routes that actually have a good return," Mr Gandy said.

AAA chief executive Caroline Wilkie said the privatisation of Australian airports had encouraged them to work with local agencies to support tourism and encourage trade.

Thirty years ago, Sydney Airport – which was privatised in 2002 – accounted for more than half of all international passenger movements.

All airports in Australia's capital cities are operated by private owners.

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