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Domestic airfares in Australia spiked dramatically in August amid rising jet fuel costs and widespread inflation.
According to new data released by the Bureau of Infrastructure and Transport Research Economics (BITRE), its domestic economy airfare index jumped up 3.3 points in August from July.
It marks the largest monthly increase since domestic borders were slammed shut in April 2020 as Australia entered its first COVID lockdown, and airlines began operating skeleton networks for essential travel only.
Business class fares similarly jumped by 2.9 points between July and August.
It comes after both Qantas and Rex announced earlier this year that both airlines would be soon forced to increase airfares as jet fuel prices hit unprecedented highs.
In March, Qantas CEO Alan Joyce said the airline had hedged around 90 per cent of the fuel it needed through to the end of June, and 50 per cent of its requirements for the September quarter, and said the airline would ultimately need to increase airfares to account for its increasing costs.
“[Hedging] gives us time to react to that higher fuel price,” he said. “Unfortunately, if we stay at these levels, airfares are going to have to go up, we’re going to have to pass them on.”
He said at that time that the airline would have to inflate airfares by 1 per cent for US$4 per barrel that jet fuels increase.
It also comes after inflation rose to its highest level in decades at 6.1 per cent in June.
Airfares have been steadily increasing in recent months, however passenger figures around the country continue to increase.
Melbourne Airport reported a 5 per cent jump in domestic passenger figures in July to 1.9 million travellers, while its international numbers spiked by 25 per cent, compared to June.
Meanwhile, total domestic passenger figures across Australia jumped by over 700,000 people in one month to 4.66 million in May, or about 91 per cent of pre-pandemic levels.
However, rapidly increasing passenger figures has seen airports around the country overwhelmed amid an underlying staffing shortage, leading to long queues are airport check-in and security areas, and increasing cases of flight delays and cancellations.
In fact, Australia’s airlines recorded their worst-ever month for flight delays and cancellations in June, surpassing the previous record-low result set just two months earlier.
The severe disruption was seen throughout the month as the industry continued to battle post-pandemic staff shortages. June’s issues were further fuelled by a mid-year school holiday travel surge and severe weather events, including flash flooding throughout NSW.
According to a seperate BITRE report, just 63.0 per cent of all flights arrived on time in June, while 61.9 per cent departed on schedule.
Meanwhile, a total of 5.8 per cent of all flights were cancelled over the month, nearly three times more than the long-term cancellation average.
The Qantas Group was again the worst offender in June, after it cancelled 8.1 per cent of all scheduled flights in June, with over 40 per cent of all flown flights seeing a delay.
Meanwhile, rival Virgin cancelled 5.8 per cent of its flights, and saw the highest percentage of on-time arrivals for the month at 62.4 per cent.
Rex performed the best with a 0.7 per cent cancellation rate, and an 82.7 per cent on time departure rate.
