Abstract
After an aborted start in the early 1990s, the Australian domestic aviation market has seen a significant shift from a duopoly market in which two full-service airlines competed with similar services, to the emergence of three airlines/four brands—three of which are low cost carriers. Aggressive marketing strategies, low fares and increased capacity by low cost carriers Virgin Blue, Jetstar and Tiger Airways have benefited many regional destinations. The research presented in this paper shows that as air fares have fallen consumers have switched from private cars, long distance coach and rail to air. The reasons for this switch include consumer recognition of the savings that are possible through lower travel costs by air and that more time may be spent at the destination. The impact of switching modes is demonstrated by analysing the impact of LCCs on Cairns, a major coastal destination in northeast of Australia.
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