Domestic airfares have soared well above pre-pandemic levels, and the extra revenue from more expensive flights has led
The quarterly report, released today, shows that the average revenue per passenger, an indication of average airfares across all fare types, was 27 per cent higher in
"Airfares have risen due to strong demand for travel and constrained supply as airlines have scaled back their schedules in response to high jet fuel costs and operational challenges," ACCC Commissioner
Index of average fare revenue per passenger -
Source: Data collected by the ACCC from
Note: Figures aggregate fare earned from business class and economy class passengers. Figures exclude ancillary service revenues. Excludes data for Tigerair.
Of the different fare types, discounted economy fares have increased the most because with fewer flights but strong demand, the airlines don't currently need to offer special fares to fill their planes.
An index of the discounted economy fares across
"Historic lows and highs for discount airfares in the same year illustrate how changeable this market has been as the industry recovers from the pandemic,"
"We accept that the airlines are still experiencing some pandemic-related resource challenges, but the ACCC will be monitoring them closely to ensure they return capacity to the market in a timely manner to start easing pressure on airfares."
"We would be concerned if airlines withheld capacity to keep airfares high",
Flexible economy and business airfares have not increased as much as discounted fares, and in
After some sizeable losses due to the pandemic, the airlines are forecasting positive financial returns on the back of strong demand and high airfares.
Flight cancellations and delays spiked in winter this year as airlines dealt with high rates of staff illness, workforce shortages and supply chain disruptions. While staff absences have declined, the industry continues to deal with workforce shortages and supply chain issues. There's also uncertainty about how the most recent increase in COVID-19 cases will impact the industry.
"As we are heading into the summer holidays, the airlines have told us they are keeping additional crew and aircraft on standby to help minimise delays,"
Jetstar,
"The airlines have significantly improved their reliability following historic lows over winter; however, flights are still regularly delayed,"
Domestic cancellations and delays -
Source: BITRE, Australian domestic on time performance monthly reports.
The report also examines the key drivers impacting airfares and shows that the level of competition on a particular route is an important factor in determining how much a consumer will pay. Other key factors are when the booking is made, demand for tickets, and the airline's corporate strategy.
"In the current climate of high airfares, competition is more important than ever in helping to constrain prices, and giving consumers more choice,"
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