Executives at Newcastle's Williamtown Airport in Australia are keen for international flights to return to their airport and once again eyeing flights to New Zealand. This is despite passenger numbers on trans-Tasman travel corridor flights generally not meeting expectations. However, the airport's bosses argue New Zealand services are sustainable.

Average passenger loads on previous flights to New Zealand

Newcastle (Williamtown) Airport (NTL) is a regional airport located 88 miles north of Sydney. The airport serves Newcastle, the second biggest city in New South Wales, and the surrounding region. Approximately 665,000 people live within one hour's drive of the airport. In calendar 2019, the airport handled 1,274,000 passengers, making it Australia's 13th busiest airport.

Primarily a RAAF base, the military long have shared their airport with commercial airlines. Those airlines, including Qantas, Jetstar, and Virgin Australia, have mostly focused on domestic operations at NTL. The airport only locked in its first international flights in 2018. Virgin Australia agreed to operate thrice-weekly Boeing 737-800 seasonal flights to Auckland (AKL) between November 2018 and February 2019.

Virgin Australia operated 71 flights over the 13 week period and carried a total of 6,687 passengers. Average loads on the Auckland-bound flights were 52% and 55% on Newcastle-bound flights.

Newcastle Airport back on the hunt for New Zealand flights

Despite the less than stellar passenger loads, Virgin Australia and Newcastle Airport formalized a three-year agreement in 2019 to keep the flights operating. What, if any, incentives Newcastle Airport offered Virgin Australia to keep flying were never disclosed.

But the three-year agreement was torn up after the following 2019/20 southern summer flying season. In sharp succession, a trifecta of travel downturns, border closures, and Virgin Australia sinking into administration ended the flights.

By mid-2020, amid the downturn, Virgin Australia was on life support, and Newcastle Airport's passenger terminal was deserted. A year later, the airline and airport are back in business. But Virgin Australia is no longer operating international flights, and Newcastle is back to handling domestic flights only.

However, the word is Newcastle Airport is back in the hunt for international services once again. As reported in New Zealand travel trade publication Travel Inc, the airport's executives say discussions with airlines are "ongoing" and flights to New Zealand are "more than sustainable."

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Who would fly between Newcastle and Auckland?

There are four potential airline candidates, and you can rule two out right away. A smaller fleet and tighter strategic focus have clipped Virgin Australia's wings.  You could presume when, or if, Virgin Australia does venture offshore again, the airline will eye other departure airports first.

"Virgin Australia has been on record saying that New Zealand is not necessarily a priority right now, so we are looking at options," says Newcastle Airport's Stephen Crowe.

Qantas has shown some adventurism with new routes lately. But the recent decision to fly to New Zealand from another secondary east coast airport (Gold Coast  (OOL)) burnt Qantas. You could safely bet Qantas won't be lining up for round two.

That leaves Air New Zealand and Jetstar. Air New Zealand flies to multiple airports along Australia's east coast, including several highly seasonal destinations. Despite experience in making seasonal routes work, Newcastle's low profile, paucity of tourism pull factors, and proximity to Sydney may work against it. On the flipside, incentives can mitigate drawbacks.

The best fit is Jetstar. The cheap and cheerful low-cost Qantas subsidiary already has a substantial presence at Newcastle Airport and is well-known in both countries. The NTL-AKL route is primarily supported by leisure and VFR travelers - Jetstar's core target market.

But with trans-Tasman travel not meeting expectations despite a travel corridor, whether any airline would risk their precious cash on international services out of Newcastle is debatable. As Air New Zealand's Hobart (HBA) flights show, airlines will come if the incentives are high enough. But Newcastle Airport does not have the deep pockets of governments.

In the current climate, executives at Newcastle Airport may have a hard time luring international flights to their airport.