For the first time in its history Jetstar will start flying out of Canberra Airport, with flights between Canberra and Brisbane to start in time for Floriade.
The low-cost carrier will start flying five times a week between Canberra and Brisbane from September 2, with the average price to be about $89.
The Qantas-owned carrier is the latest in a series of budget airlines to start flying out of Canberra, adding further competition to the market.
It also represents a change of heart from the airline, which previously claimed it could not fly to Canberra Airport due to excessive landing fees.
However, Jetstar Group chief executive Gareth Evans said Canberra became more tenable following the Covid pandemic as there had been a huge push for domestic travel. He also said the airline had aimed to dramatically expand its services in the wake of the pandemic.
"Domestic travel, there's a huge appetite for it right now, we've added six new routes to our network over the last 12 months," Mr Evans said.
"We've been looking and continue to look for potential opportunities where there is profitable growth for us ... and this is one of them."
While the demand for domestic travel is driven by the fact international borders are shut, Mr Evans said Jetstar would not pull out of the Canberra market once overseas travel was allowed again.
"Our intention is to be here for the long time," he said.
"We don't want to enter a market and then pull out again, it's got to be sustainable for us and we feel we're in a position to do that now."
Chief Minister Andrew Barr said Jetstar's arrival was a significant step for tourism in Canberra.
"It represents another step in our city's aviation journey," Mr Barr said.
"I've had a very simple and straightforward agenda for Canberra tourism and that's to make it cheaper and easier for tourists to get our city and a really significant partner in achieving that outcome is an airline like Jetstar."
Mr Barr has intensely lobbied Jetstar to come to the Canberra for several years now and has travelled to the airline's headquarters in Melbourne many times to make the case.
"These things don't just happen you've got to be engaged with the businesses that are making the investment decision," Mr Barr said.
"Aviation is a challenging industry it's got high capital costs and low margins and so I appreciate the strategic precision of which an airline needs to approach its investment decisions.
"But I think there is an underlying and fundamental truth that this is a strong and diverse market that will respond positively to an airline like Jetstar."
Jetstar has been operating for 17 years and has never flown out of Canberra Airport. The nation's capital would be the 22nd Australian destination for the airline.
Canberra Airport chief executive Stephen Byron hoped Jetstar would have a more regular presence in Canberra.
"It's such an exciting time for aviation in Canberra," he said.
"We are now directly connected to 12 destinations across the country and it is a fantastic result for the region when confidence in travel is growing and leisure travel is strong."
Regional Airlines Australia (REX), Alliance Airlines, Link Airways and FlyPelican have all started routes out of Canberra in the past year.
Mr Barr has also been lobbying for direct flights between Canberra and Wellington.
The chief minister recently travelled to the New Zealand capital to meet with local government counterparts, airlines and tourism officials to discuss flights to and from Canberra.
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