The following excerpt provides the key details and the full analysis can be found here
Darwin is already well served from Manila
Jetstar already serves Manila from Darwin, where it offers onward domestic connections, but non-stop LCC widebody flights always have a far more meaningful impact. Jetstar’s Manila-Darwin service mainly accommodates the local market and is currently operated four times per week with A320s. Beyond the Philippines, the service continues on to Tokyo, with fifth freedom rights.
PAL also entered the Manila-Darwin market on 1-Jun-2013 and operates the route daily with A320s. The flight has been operating as a tag with Brisbane and Perth, with a Manila-Darwin-Perth rotation operated four days and a Manila-Brisbane-Perth rotation operated three days. But the tags have not been successful. PAL recently decided to stop serving Perth from 3-Sep-2013. At least for now Brisbane will continue to operate with three weekly flights via Darwin.
Brisbane and Perth would both prefer to see non-stop flights from Manila. PAL previously served Brisbane direct from Manila but dropped the route in Oct-2010. Brisbane Airport sees sufficient demand to support a non-stop widebody service, driven partially by the traditional strong inbound market from the Philippines to Queensland, which has Australia’s third largest Filipino population after New South Wales and Victoria.
Brisbane Airport also sees growing outbound demand for the Philippines as the Philippines raises its profile as a tourist destination. The airport also sees Brisbane-Manila emerging over time as a strong connecting market. As PAL starts to pursue ambitious expansion in Europe, Australia would be a logical connecting market to focus on, which in turn could help support increased capacity across its Australian network.
But PAL at this point is not planning to allocate additional widebody capacity to the Australian market, leaving Brisbane with a less than ideal one-stop product, which particularly impacts potential transit traffic for PAL. Tagging Brisbane and Perth with Darwin was a sort of compromise as it was feasible with A320s and PAL did not have the widebody capacity available for the new Australian services. But Darwin itself is a very small market and has become increasingly competitive since SIA subsidiary SilkAir launched services to Darwin in 2012 and Malaysia Airlines (MAS) prepares to enter on 1-Nov-2013. Indonesia AirAsia also resumed service to Darwin in Jul-2013, ending a 14 month absence.
In the relatively limited local Darwin-Manila market PAL has to compete with Jetstar. In the broader Darwin-Asia market, PAL has to compete with SilkAir/SIA and soon MAS, which it does by offering lower fares in what has traditionally been a relatively high fare market.
The entry of SilkAir, PAL and MAS and resumption of service from AirAsia has had huge impact on Darwin’s international market as they are Darwin’s only international carriers. The Darwin-Southeast Asia market will be served with about 7,700 one-way weekly seats in Dec-2013, representing a nearly 60% increase compared to Dec-2012 levels. (But capacity will be up only marginally compared to Dec-2011, when Darwin had a larger international operation from Jetstar and a larger presence from Indonesia AirAsia, which at the time was the airport's only foreign carrier.)
Darwin to Southeast Asia total capacity (one-way seats per week): 19-Sep-2011 to 2-Feb-2014