Two years ago, no US airlines flew to Brisbane, Australia. Then in late 2022, United launched flights from San Francisco to Brisbane, and then in late 2023, launched flights from Los Angeles to Brisbane. This upcoming peak season, American will add flights from Dallas to Brisbane, and Delta will add flights from Los Angeles to Brisbane.
What’s going on here? Nothing against Brisbane, of course, because it’s no doubt beautiful, and many people love the Gold Coast. But why are US airlines suddenly adding so much service? What changed overnight? As you’d expect, it’s not a coincidence, and the explanation isn’t just a sudden increase in demand.
Queensland government offering subsidies for Brisbane flights
As flagged by Enilria, the government of Queensland is promoting how it’s offering massive subsidies to US airlines adding flights to Brisbane. All three airlines are receiving significant support from Queensland’s $200 million Attracting Aviation Investment Fund.
These routes are supported by the government of Queensland for a period of three years. Here’s what the government views as the economic upside:
- United’s flight from San Francisco, operating since October 2022, supports 227,000 inbound seats and $151 million in visitor expenditure over three years
- American’s flight from Dallas, starting October 2024, supports 140,000 inbound seats and $113 million in visitor expenditure over three years
- Delta’s flight from Los Angeles, starting December 2024, supports 271,000 inbound seats and $208 million in visitor expenditure over three years
With these increases in service, total seats between the United States and Brisbane are increasing to 178,000 as of 2024, and to 247,000 as of 2025. With these incentives, Queensland is essentially paying hundreds of dollars per seat operated to the airport.
Do airline subsidies like this make any sense?
Of course these subsidies explain why we’re seeing this sudden increase in service to Brisbane. US carriers tend to have an excess of wide body capacity in the northern winter, and these incentives make these routes much more likely to succeed.
Still, I can’t really make sense of how this makes any financial sense, or how this is the best way that the government’s money could be spent:
- Demand for travel between the United States and Brisbane isn’t just going to triple or quadruple overnight, so offering massive incentives to all these airlines seems like an overkill
- Many passengers will simply use these flights to connect in Brisbane rather than another Australian gateway, which doesn’t do much to contribute to the Queensland economy
- After the subsidies run out, I’m curious how many of these flights end up being maintained in the long run
It’s not uncommon for airlines to get incentives for starting new service to airports. However, the amounts are typically in the hundreds of thousands of dollars, or even in the low millions of dollars. In this case, each airline is getting tens of millions of dollars in incentives, which is a massive amount.
I just question how many people will end up spending a lot of money in Queensland because of these flights, who wouldn’t have otherwise done so. To what extent are people motivated to visit a destination just because there’s a nonstop flight, rather than visiting the destination they intended to visit?
I just have to imagine that the amount of money spent by the government per incremental visitor who wouldn’t have otherwise visited Brisbane is astronomically high. But I could be wrong.
Bottom line
This winter, we’ll see all of the “big three” US carriers flying to Brisbane, with service from a total of four gateways. As it turns out, these flights aren’t being added due to some massive increase in demand, but rather due to a massive increase in incentives.
For the next three years, the government of Queensland is paying each of these airlines tens of millions of dollars to maintain this service. I find these kinds of incentives to be questionable, as I wonder how much actual additional tourism these routes create.
What do you make of these incentives being offered for Brisbane flights?
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