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Exclusive: Data reveals domestic airfares aren’t getting cheaper

written by Jake Nelson | March 17, 2023

Victor Pody shot aircraft, including this Jetstar A320-200, VH-VFO.

The fall in the average price of domestic flights appears to have plateaued despite climbing down from a 15-year high in December.

New data released by the Department of Transport shows little change in the price of business or economy tickets over the last two months, despite the ACCC stating last year it was “expecting” prices to go down after the Christmas holidays ended and more employees were recruited.

Airfares are currently expensive due to a combination of high fuel prices and the industry putting on less flights to mitigate the delays caused by staff shortages.

Strong pent-up demand caused by three years of COVID-19 restrictions, meanwhile, has meant airlines have felt little need to release bargain deals, with consumers consistently paying high prices to fly.

Now new BITRE data released by the Department of Transport show business airfares were at 60.8 per cent of July 2003 index levels in March 2023, restricted economy at 81.7 per cent, and the best discount at 78.5 per cent.


This represents little change from February, where they were at 58.7, 82.0, and 74.7 per cent, respectively, and January, where they were at 57.0, 81.5, and 74.0 per cent respectively.

Though this is an improvement from December, where the best discount was at 111.4 per cent of July 2003 levels, domestic airfares are still not falling as fast as the ACCC would like, as outlined in its latest quarterly report last week.

“While it’s positive to see airfares fall from record highs in 2022, passengers are still generally paying more to fly today than they were before the pandemic,” ACCC commissioner Anna Brakey said.

“Airfares typically come down after the Christmas travel peak due to a seasonal decrease in demand, however some of this reduction is also explained by the airlines increasing their seat capacity.”

The Morrison Government ordered the ACCC to monitor domestic airlines’ fares, costs, and profits in June 2020 during the pandemic and provide quarterly reports. The order will expire at the end of June this year unless renewed by Labor.

BITRE’s domestic airfare index monitors changes over time in the price of Australian air travel. The current system began in October 1992 and is presented as a price index in various fare classes, based on the top 70 routes.

BITRE defines the best discount as the cheapest fare available, excluding baggage surcharges, and covers Qantas, Virgin, Jetstar and Rex.

High airfares are particularly controversial given the strong half-year performance of all three major Australian airlines.

Earlier this year, Qantas announced it recorded an extraordinary profit before tax of 1.428 billion; Virgin Australia told staff it generated $2.5 billion in revenue during the same time frame; while Rex’s capital city 737 flights have moved from a loss into regular profit.

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