The cost of domestic flights has increased by 56 per cent from July to August,with passengers finding it harder to find a new seat in the event of a cancellation.

The cost of domestic flights has increased by 56 per cent from July to August,with passengers finding it harder to find a new seat in the event of a cancellation.Credit:Flavio Brancaleone

Prices have jumped even as passengers faceddelays and flight cancellations across the country as carriers failed to cope with the bounceback in demand.

“After about 18 months of historically low airfares,the cost of domestic flying has risen sharply in response to strong demand,temporary capacity reductions and very high jet fuel prices,” ACCC Chair Gina Cass-Gottlieb said in a statement on Wednesday.

“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.”

About 4.7 million travellers flew domestically in July,the highest number since the start of the pandemic and just 11 per cent less than in July 2019. In June,the number of domestic passengers reached 97 per cent of the June passenger numbers in 2019.

Increased demand coupled with reduced capacity meant that 82 per cent of flights in peak periods were full. This has made it harder for passengers to find seats on a new flight in the event of a cancellation,the consumer watchdog noted.

The ACCC monitors the prices,costs and profits of Australia’s domestic airline industry and provides quarterly reports to inform policy for the next three years,following a directive by former treasurer Josh Frydenberg in 2020.


The regulator also confirmed it was investigating Qantas after customers reported difficulties in using flight credits,but did not comment further as the investigation was ongoing.


Qantas carried 39 per cent of all domestic passengers in July,compared with 33 per cent for Virgin and 5 per cent for Rex. All three increased their market share after winning passengers from Jetstar,whose market share fell to 23 per cent. Qantas and Jetstar combined carried 62 per cent of passengers,slightly down on April.

Business airfares rose 17 per cent between June and August,the consumer watchdog found.

“Pent-up demand for leisure travel,particularly from people in the colder southern states,continues to drive the recovery in passenger numbers,” said Cass-Gottlieb. “Demand on routes between Canberra,Melbourne and Sydney has lagged ... in part due to the slower recovery of corporate and business travel.”

There were 43 carriers offering international passenger services to and from Australia,compared with 57 before the onset of COVID-19,the report said.

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