Jetstar is thinking of abandoning Avalon Airport operations after five years of losses

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Melbourne’s Avalon Airport is negotiating with Jetstar and the state government to secure a funding package in order to keep the airline flying out of Victoria’s second airport.

After injecting $2.75 million into the airport and signing an 18-month contract in December 2013, Jetstar is rethinking its Avalon operations which continue to under-perform.

Fairfax Media reports Jetstar has been losing money on the Melbourne-Sydney route for the past five years and with the airline’s obligations concluding in April, the airport’s long-term future is under question.

“Our discussions with the state government and Avalon Airport about the viability of these services are ongoing,” a Jetstar spokesperson said.

If negotiations between Avalon, owned by transport magnate Lindsay Fox’s Linfox Group, and Jetstar Airways fail, the airport is likely to approach other airlines, such as Virgin, as an alternative carrier replacement.

Location and access have been major concerns for the airport in terms of competing with Tullamarine. The previous coalition government failed to deliver a promised light rail service between the city and Avalon, which is around 55km southwest of Melbourne.

Melbourne Airport’s reduced charges for airlines and superior proximity to a wider customer base are also factors.

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