Australia's Qantas boosts Japan route as economic, tourism ties deepen

[SYDNEY] Qantas Airways said on Friday it will launch daily non-stop flights from Melbourne to Tokyo from December in response to revived tourism and trade ties between Australia and Japan.

Japan was once Australia's largest inbound tourism market before being overtaken by countries including China, the United Kingdom, the United States and even Singapore, a city-state with a small population.

But a long-running decline in Japanese tourists and business travellers has reversed with trade relations strengthening and Japanese ski fields enticing Australian holiday-makers en masse.

"Australia is benefiting substantially from its strong links to Asian economies," HSBC Australia and New Zealand chief economist Paul Bloxham said in a phone interview. "That was in previous years associated with the mining industry but it has shifted to services, including tourism."

The number of inbound visitors from Japan rose by 17 per cent to 347,000 in the 12 months to June 30, according to Australian Bureau of Statistics (ABS) data, while spending rose by 14 per cent to A$1.53 billion (S$1.56 billion).

The tourism flows between Japan and Australia, which were once wildly unbalanced in favour of Japanese visiting Australia, are now even, according to ABS data, as Japan has become a popular holiday destination, particularly for skiing.

Japan was Australia's largest trading partner until 2007, when it was eclipsed by China. However, a free trade agreement between Australia and Japan came into effect in January 2015, which coincided with increased business travel between the two countries.

The increasing passenger numbers are enticing airlines to offer the route, with rival ANA Holdings in December 2015 returning to the Sydney-Tokyo market for the first time since the 1990s.

Qantas, which had pulled out of the Melbourne-Tokyo route in 2008 citing high fuel prices and low demand, began new daily flights from Brisbane to Tokyo in August 2015.

"(The Japanese) market has really rebounded in recent times and increased aviation capacity has definitely played a big part in the turnaround," Tourism Australia chief executive John O'Sullivan said in an email.

REUTERS