Domestic Airfares Soar After Collapse of Regional Airlines, Minister Says Overall Prices Trending Downward

Cheaper and mid-range domestic airfares in Australia have seen a significant increase in the past three months following the collapse of regional airlines Rex in July, according to the Bureau of Infrastructure and Transport Research Economics (BITRE). The agency compiles a monthly survey of airfare prices from internet booking sites, and its “best discount airfare” price index shows a rise from 57.5 points in July to 70 in September 2024, indicating a 21.7% increase. Restricted economy fares also saw a significant surge from 81.3 to 93.6 in September, a change of 15.1%. However, there was little movement in the more expensive business class flights, with a slight increase from 62.2 to 63.5.

In response to the data, Minister for Transport Catherine King stated that overall airfare prices had dropped. She mentioned that fares today are lower than their 2022 peaks, lower than pre-COVID levels, and in line with long-term trends. The minister also highlighted that the Australian Competition and Consumer Commission (ACCC) is closely monitoring airfares to ensure that other carriers do not increase prices on routes where Rex is no longer operating. Minister King emphasized that if major airlines like Qantas or Virgin misuse their power, they can expect to face consequences.

On the other hand, Senator Bridget McKenzie, the opposition counterpart, criticized the government, stating that they were not doing enough to address competition in the aviation industry. She called for more competition and reforms to benefit Australian travelers, urging the Labor party to take action.

Qantas, one of the major airlines in Australia, responded to the report by stating that domestic airfares have remained relatively flat since April and are lower compared to the same period last year, considering inflation. A Qantas spokesperson clarified that the data in the BITRE report does not represent the average fares paid by customers. The spokesperson mentioned that Qantas and Jetstar offer regular sales fares, with Jetstar providing fares as low as $67 between Melbourne and Hobart and Qantas offering fares for $139 between Sydney and Ballina. The airline also highlighted that airfares are seasonal, with prices generally higher in September due to the busy school holiday period.

To provide a clearer picture of current airfares, an analysis of Google Flights showed that a Jetstar flight from Sydney to Brisbane was available for $74 on a specific date, while the next cheapest flight was $108 with Virgin. However, it’s important to note that airfares can vary depending on the date and time of travel. For example, during football finals season, the lowest one-way flight prices were $175 with Jetstar, $250 with Virgin, and $267 with Qantas.

Previously, Rex had offered airfares as low as $87 for a flight between Brisbane and Sydney, including luggage, which Virgin matched. Rex’s presence in the market had directly competed with Virgin on price and service, while also forcing Jetstar to lower its pricing.

The BITRE price index for the best discount fare reached a peak of 111.3 in December 2022, aligning with Minister King’s comments about fares being lower than their previous highs. The index is derived from a monthly survey of airline internet booking sites, reflecting the lowest available fare on the last Thursday of each month. It is important to note that the index does not measure real airline yields or average fares paid by passengers.

The government agency responsible for compiling the data has stated that it does not reflect actual fares paid by customers but provides a price index of the lowest available fare in each fare class over selected routes. The Epoch Times reached out to Virgin and the Australian Competition and Consumer Commission for further comment on the matter.

In conclusion, the collapse of regional airlines and increased competition in the market have resulted in cheaper and mid-range domestic airfares in Australia. While overall airfare prices have dropped, there have been concerns about the government’s efforts to address competition in the industry. Major airlines like Qantas and Virgin have responded to the report, highlighting that airfares have remained relatively flat and offering regular sales fares. However, it’s important for travelers to consider seasonal variations in airfare prices and compare different airlines for the best deals.