The ACCC has revealed domestic airlines are significantly reducing capacity to mitigate the delays and cancellations caused by staff shortages and sickness.
The competition watchdog revealed the cut in seats for sale during the last few months came despite the local industry hitting 97 per cent of pre-COVID passenger numbers in June.
Last month, Australian Aviation reported separate Cirium figures that showed Virgin, Qantas, and Air New Zealand were named among the global airlines with the current highest cancellation rates. Domestic aviation also repeatedly broke all-time records for delays in April, June, and July 2022.
The surprising news that capacity has been reduced was revealed in the ACCC’s latest quarterly report on the industry as it recovers from the pandemic.
“The domestic airline industry carried 4.7 million passengers in July 2022, marking a new high since the pandemic first impacted the industry in early 2020,” said the competition watchdog.
“July 2022 was the fourth consecutive month with more than 4 million passengers flying, representing notable stability for an industry that has endured regular interruptions in recent years.
“Despite the high number of passengers, the July 2022 figure only represented 89 per cent of the number of passengers who flew at that time of year in 2019, prior to the pandemic.
“This was the same as the recovery levels reached in April 2022, but below the recent high in June 2022, which saw passenger numbers reach 97 per cent of pre-COVID-19 levels.
“Figure 1 also shows that in contrast to passenger numbers, the capacity offered by the domestic airlines has reduced in each of the last 3 months. The level of capacity peaked in April 2022 at 6.1 million seats before falling to 5.7 million seats in July 2022.
“While airlines have taken steps to recruit additional staff, the recent increase in flight cancellations and lower on-time performance suggests the industry is not yet capable of handling such high levels of demand.”
The ACCC also said the combination of high demand and reduced capacity meant the industry-wide load factor, or the proportion of seats that are filled, increased to 82 per cent in July 2022.
“This compared with 79 per cent pre-pandemic. Several routes to northern Australia had more than 90% of seats filled, including routes to Cairns, the Gold Coast and Darwin.”
Last month, Qantas chief executive Alan Joyce issued a ‘formal apology’ to long-standing customers for the airline’s post-pandemic struggles.
The message came alongside a range of perks for frequent flyers, including a $50 voucher towards a return flight and a status extension for silver frequent flyers or above.
“Over the past few months, too many of you have had flights delayed, flights cancelled, and bags misplaced,” Joyce said via video and an email.
“On behalf of the national carrier, I want to apologise and assure you that we’re working hard to get back to our best.”