The current Tasmanian experience is a classic example of the importance of air travel to economic developement.
Now simply take Tasmania's case and multiply it tenfold and apply it to every Australian city except Sydney. This is the matter that has been driving me nuts ever since I learned about Qantas's stranglehold on 747 turnarounds in the late 70's (which Ansett was not allowed to break).
International business investment cannot easily flow to any city that does not have a plentiful supply of capacity on direct flights from the investing area. In Melbournes case, travelling from London or the U.S. via Sydney effectively makes Melbourne approximately three hours "further" from those centres of investment than Sydney - which has, and continues to cause in my opinion, economic damage to Victoria.
On a personal level, I've lost count of the number of British acquaintances who have opined to me that its "so hard" to visit Melbourne during their Australian travels.