Melbourne Airport authorities are planning to construct a new "T5" terminal to move low-cost carriers Jetstar and Tiger Airways out of the main terminals, according to a report in The Australian.
Such a move could pave the way to freeing up domestic capacity for Qantas and Virgin Blue, both of which are constrained by the limited domestic space at Tullamarine.
A map of the terminal layout at Melbourne Airport shows just how much capacity is currently available.
The new terminal would be towards the southern end of the airport.
With Jetstar out of the way, Qantas -- which operates Australia flights out of terminal 1 -- could expand its Melbourne domestic flights further, taking over Jetstar's terminal 1 gates.
Similarly, if Tiger shifts from its current location in Terminal 4, then that terminal could be repurposed for other airlines.
Regional Express (Rex) and Skywest, which both fly from Virgin Blue's home in the old Ansett Terminal 3, would be prime candidates for that move, given that they operate smaller aircraft which can more easily use the remote stands from Terminal 4. Their departure would free up Terminal 3 for Virgin Blue's domestic use.
Lack of space for domestic flights is one of the stumbling blocks to changing the treatment of trans-Tasman flights from international to domestic arrangements.
Currently, international flights from Melbourne Airport all depart from Terminal 2, which itself has capacity issues, especially at key international departure times.
With more room for key trans-Tasman flights to turn domestic, Qantas could fly to NZ from Terminal 1, while Virgin Blue's subsidiary Pacific Blue and codeshare partner Air New Zealand could fly from Terminal 3.
The shuffle could also free up extra capacity in Terminal 2 for other international flights, leading to greater competition on some overseas routes, plus further options for direct flights that are currently constrained by Terminal 2 capacity.
Terminal 2 passengers would also benefit from a reduced demand for security screening and customs checks.
Business travellers have another reason to be pleased if the two main low-cost carriers are out in a separate terminal.
In the event of flight delays, which are more common on low-cost carriers in Australia, delayed passengers will stack up in the low-cost terminal, leaving the rest of the terminal relatively unaffected by the resulting chaos.
Of course, Qantas Frequent Flyer programme members who have to use Jetstar for some flights would likely wish Jetstar would stay exactly where it is.
It's unlikely that Jetstar and Qantas would build lounge facilities in a new terminal to match the existing Qantas terminal's offerings, which higher-tier Qantas Frequent Flyers can access if they're flying on Jetstar.