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Business class fares lowest in eight years

written by Adam Thorn | March 18, 2021

Virgin new Adelaide lounge 1
Virgin Australia’s new ‘Lounge of the Future’ in Adelaide, which opened last month (Virgin)

Domestic business class fares were at their cheapest in nearly eight years in December, Australian Aviation can reveal.

New Bureau of Infrastructure and Transport Research Economics (BITRE) statistics reveal how the monthly price index hit just 69.9 before Christmas – it’s lowest since February 2013.

It comes as the ACCC said yesterday that competition between Qantas, Virgin and now Rex is keeping ticket prices down as networks recover from COVID.

The BITRE data is derived from a monthly survey of airline internet booking sites.

The series is a price index of the lowest available fare in each fare class, weighted over selected routes. It does not measure real airline yields, or average fares paid by passengers.

Aside from low business class fares, it also showed regular economy prices in December were at their lowest levels since October 2018.

Yesterday, ACCC chair Rod Sims said the rivalry between airlines had handed consumers a good deal.


“Domestic airfares normally peak over holiday periods but we didn’t see that happen in December, partly because the three airline groups offered competitive promotions in a bid to get customers back in the skies.”

However, he warned that while airlines are seeing a recovery in passenger numbers, the market remains “very challenging”.

Business class has become a huge battleground over the last few months, with Virgin reopening all of its lounges this week and Qantas claiming it has acquired 25 new corporate accounts in the last year.

Yesterday, Virgin Australia chief executive Jayne Hrdlicka announced the airline would lease eight or nine more 737s to expand its domestic capacity.

The move came as a surprise given new owner Bain said last year it intended to downsize the business’ 737 fleet from 85 to 56 and also axe its ATR, Boeing 777, Airbus A330 and Tigerair Airbus A320s altogether.

Hrdlicka told The Sydney Morning Herald she believed the domestic market was now “moving off life support”.

“We are committing to more aircraft and we are just really positive about the outlook,” she added.

Earlier this month, the government also launched a new initiative that will see it supplement 800,000 half-price fares from April.

The announcement was one of a number of support measures designed to resuscitate the domestic aviation market, which also included cheap loans to small business coming off JobKeeper, wage subsidies for 8,600 international aviation employees and a six-month extension of the ‘RANS’ and ‘DANS’ supplemented routes initiative.


Comment (1)

  • Ryan


    Economy airfares are great but Qantas isn’t budging on biz fares. I personally wouldn’t mind splurging on some biz class flights but alas.

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