There is a large population within a reasonable radius of AVV. I would say there is a lot of potential for low cost flights out of AVV to larger centres. Time will tell.
I think the media are being a bit irresponsible with the whole cab ride thing. If you live in MEL you are welcome to drive out to AVV. Though there are MANY people living closer to AVV than Tulla who I am sure are willing to utilise flights.
I doubt the market would be big enough for two carriers, unless they served different destinations.
I wonder how AVV will go in the long term?