Domestic airfares are sky high – here’s why

A ‘perfect storm’ of factors sees Australian airfares skyrocketing.

By Matt Lennon, September 7 2022
Domestic airfares are sky high – here’s why

Australian travellers are being pummelled by ticket prices hitting an almost two-year high – and the trend is expected to last until at least October, suggests a new analysis by the Australian Competition and Consumer Commission (ACCC).

The pricing watchdog’s quarterly Airline Competition in Australia report shows the cheapest economy class airfares were 56% higher in August this year compared to just four months prior, when they sank to an 11-year low.

That spike was driven by simultaneous increases in fuel prices, ongoing staff shortages and high demand, even as airlines cut the number of flights to trim capacity by reducing the number of seats in the sky.

As a result, Qantas, Virgin Australia and Rex are offering fewer seats at the cheapest economy rates and more seats at higher prices, says the ACCC.

The ACCC price comparison also found business class airfares rose by around 17% in the three-month period between June and August 2022.

Analysis of BITRE data on domestic discount airfares (grey bars indicate December and Easter holiday periods).. ACCC
Analysis of BITRE data on domestic discount airfares (grey bars indicate December and Easter holiday periods).
ACCC

“In these circumstances, more than ever, the level of competition between airlines is incredibly important to maintain pressure on ticket prices and service levels across the industry,” ACCC Chair Gina Cass-Gottlieb noted.

The ACCC says pent-up up demand for leisure travel, “particularly from people in the colder southern states”, continues to drive the recovery in passenger numbers.

“Demand on routes between Canberra, Melbourne and Sydney has lagged behind, in part due to the slower recovery of corporate and business travel.”

And Virgin Australia is making the most of the changed market dynamics and its relaunch into the middle of the field by delivering corporate economy airfares at consistently two-thirds the price of Qantas on Australia’s key domestic capital city routes.

As reported by travel industry newsletter Travel Daily, an independent analysis of airfares on the ‘golden triangle’ routes between Brisbane, Sydney and Melbourne found Virgin maintaining a 34%  price advantage over Qantas in economy, with business class fares a staggering 56% cheaper.

Meanwhile the average intercity jet fares of Rex sit “bang in the middle” between those of Qantas and Virgin Australia, observed corporate travel industry consultant Tony O’Connor from Butler Caroye.

KC
KC

09 Nov 2011

Total posts 31

The article should read “ by extortionate Qantas pricing.”

I am still getting great short notice fares with VA, and REX often close behind.

Just grabbed a $155 one way fare MEL to ADL for tomorrow, and then 10,000point upgrade to J class. QF want $473 for economy or $1044 for business 😆. VA business was $459. 

QF has lost the plot with pricing.

23 Oct 2014

Total posts 231

QF now over $4000 J trans con in the B737 - ONE WAY ! that’s $8100 return.  Eye watering.  

12 Aug 2020

Total posts 9

Agreed, pricing is currently outrageous, especially in J, and on Qantas, but the increase is across all airlines. Real tragedy is that given staffing, engineering and ground handling difficulties, someone is paying those exhorbitant fares. Makes me nostalgic for pandemic pricing of around $150 each way SYD - ADL. That pricing took me back to pre-privatisating in the 1990s. And the lounges were empty!

KC
KC

09 Nov 2011

Total posts 31

On Thu 8 Sep, I had to go to ADL last minute, I got a one way fare for $155 with VA, the flight when I boarded was almost completely full, maybe 2 or 3 empty seats. However QF wanted nearly $600 in economy. VA j class was only $699. It seems VA at least are still throwing out some lower prices on the day at off peak times.

 I don’t deny prices have inched up at VA and Rex, but QF is out of control and unrealistic. They’ve priced themselves out of my budget, not that I’ve been a big user of QF for some time now.

Qantas - Qantas Frequent Flyer

02 May 2014

Total posts 15

Time for the Pollies to get out of their comfortable Chairman's Lounge Chairs and say a few words,  have a close look at our legislation re the Airline Industry / Customer rights as compared with Europe and the US. Don't see the Polies getting bumped to a lower class when a higher fare paying passenger requires a seat. Joe average for example has No protection when you book a J or F Reward seat and get bumped down or off by a high fare paying passenger.

08 Sep 2019

Total posts 3

Even short hop prices on supposedly edeal from PQQ to SYD [domestic] on Q have shot up a lot.   What a rip-off !!   


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