Melbourne Airport has seen solid growth during 2006/07 in both international and domestic passengers. Overall passenger numbers increased by over 1 million to 22.4 million for the financial year, an additional 20,000 passengers each week compared to the previous year.

International passenger traffic reached 4.5 million for the first time, buoyed by a strong 4th quarter, resulting in a 3% increase on the 2005/2006 financial year. Domestic passenger numbers performed strongly, delivering 6% growth, on top of the 4% growth achieved in the previous year.

"Growing competition between domestic carriers is encouraging more people to fly," said Melbourne Airport CEO Chris Barlow. "With such a healthy domestic market, the big winners are consumers - with increased competition, new routes and cheaper airfares," he said.

On the international front, global delays in the delivery of new international aircraft continue to have an impact on airline seat capacity to and from Melbourne.

"In the last two years, Melbourne has seen a notably slower rate of international passenger growth," said Mr Barlow. "This has been a direct result of lack of airline seat capacity to and from this city."

Despite capacity restraints, demand for Victoria remains strong, with passenger loads on international flights continuing to grow.

Further evidence of continued strong demand for Victoria can be seen by the jump in international passenger growth that followed the introduction of new capacity from Jetstar, Garuda Indonesia and Thai Airways in the second half of the year. International passenger growth increased from -2% and 3% in the 1st and 2nd quarters of the year, to 6% and 7% in the 3rd and 4th quarters respectively.

"As we have seen in the second half of 2006/2007, Victorians clearly respond well to increased capacity from airlines," said Mr Barlow. "These results demonstrate that when airlines provide the seats, passengers will continue to fill them."

Recent outcomes from Australian Government air service negotiations also look set to have a positive impact on international capacity in the coming financial year.

"Successful Air Service Agreements have now been reached with the governments of the United Arab Emirates and Qatar, which will provide opportunities for further seat capacity and access for new markets into Melbourne," said Mr Barlow.