Daily low-cost flights between Canberra and Melbourne would inject $17 million a year into the ACT's economy and create more than 100 jobs, with the government revealing an announcement could be made before the end of the year.
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Chief Minister Andrew Barr has also signalled his desire to see Tigerair and Jetstar extend their international offerings through Canberra and ambitions to see flights to America via Auckland.
Mr Barr has written to the Victorian Premier Daniel Andrews spruiking the benefits of re-establishing a low-cost air route to Melbourne, in a sign that cheaper air travel for Canberrans could be a step closer.
"I am certain that a new, more affordable service connecting Melbourne with Canberra's catchment areas of nearly 900,000 people would also benefit Melbourne and regional Victoria, increasing visitor numbers and providing additional economic activity for your state," Mr Barr wrote.
Mr Barr is hopeful an announcement on an low-cost air route from Canberra would happen this year.
"Obviously these things are commercial in nature, they are commercial decisions of the airlines, but there's interest, we're working hard on it," he said.
"We're endeavouring to do everything we possibly can to encourage those carriers to enter the market.
"I think there's a very strong case for it and we would be the only major city in the country that doesn't currently have low-cost carriers, so there's room in the market for them and I hope they'll come soon."
A new daily low-cost air route between Canberra and Melbourne would generate an extra $17 million a year for the ACT economy and create about 124 jobs. Tourism is currently worth about $2 billion to the ACT.
"One of the focus areas that will assist us in realising the ACT's 2020 tourism potential is developing and facilitating access initiatives, including growing direct international flight services and securing low-cost carrier domestic services," Mr Barr said.
The promising sign for Canberra's tourism industry comes just over a month before the start of international flights in September, which will offer a direct route to Wellington and Singapore.
Mr Barr said international flights would be the most significant boost to international tourism Canberra had ever seen.
"It's the beginning of our ambitions for better aviation connection to Canberra so we're also focusing on low-cost carriers so very keen to get Jetstar and Tigerair flying into Canberra, initially on domestic routes, but longer term, maybe more international," he said.
"With Singapore Airlines, [we're] keen to grow the four flights a week to five, six and ultimately a daily flight and then we're also looking at connections through New Zealand on to North America, so a Canberra-Auckland flight that then connected into the hub that is Auckland airport and then on to north and South America is a medium-term proposition that we'd look at in five years time or so."
Mr Barr said demand for Canberra's first international flights had been incredibly strong.
"It's very encouraging. With the new sister city relationship with Wellington, we're working both on the Singapore connection but also the Canberra-Wellington connection," he said.
"It's very competitive prices for Singapore Airlines – in fact it's cheaper to fly return to Wellington and return to Singapore than it is on some of the domestic flights even to Sydney and Melbourne, so we're certainly expecting strong take-up.
"That Canberra-Wellington three-hour short break experience will be very lucrative for both cities."
As the government increases its push to lure more tourists to Canberra, a newly refurbished visitor centre, next to the National Capital Exhibition at Regatta Point, was officially opened on Friday.
