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Sydney Airport’s domestic passenger numbers in April were still only at 86 per cent of pre-COVID levels – presenting yet more evidence the local recovery is stagnating.
The business said the “sluggish” numbers were down to high airfares and airlines continuing to operate at reduced capacity.
Australian Aviation quarterly print & digital magazinesHowever, the news comes despite Qantas significantly increasing services on the Golden Triangle of Sydney–Melbourne–Brisbane in late March, a move many hoped would turbocharge the recovery. In fact, the latest data suggests the domestic industry is actually going backwards.
In June 2022, Sydney Airport was operating at nearly 90 per cent of 2019 levels, while nationwide, the ACCC put the figure at 97 per cent.
Those figures, though, came alongside all-time records for delays being broken that month and in April and July.
In response, airlines cut flights and held staff in reserve to combat the problem, allowing employees to jump on to problem flights at short notice. The move led to fewer seats being sold and prices increasing to help fund it.
Sydney’s figures mirror those reported by Melbourne for the same month, which showed a slight decrease in domestic traffic.
In March, Sydney Airport’s CEO, Geoff Culbert, called the recovery “stagnant” and appeared to blame airlines for offering fewer seats for sale to consumers alongside higher airfares.
“The domestic passenger recovery at Sydney Airport has been stagnant since April last year, with reduced capacity and high airfares impacting people’s travelling habits,” said Culbert.
Late last year, the ACCC warned it would be keeping a close eye on airlines to ensure they lower prices after the busy Christmas period.
“The ACCC will be monitoring the domestic airlines closely to ensure they return capacity to the market in a timely manner to bring downward pressure on airfares,” it said in its quarterly report on aviation.
“In this context, the ACCC would be concerned if the airlines withheld capacity in order to keep airfares high.
“Airfares are higher than they have been in years and higher than pre-pandemic levels. The average revenue per passenger, an indication of average airfares across all fare types, was 27 per cent higher in October 2022 than it was in October 2019.
“Of the different fare types, the discount economy fares are particularly high because airlines don’t need to offer sales in order to fill their planes. The discounted tickets that are made available are sold out quickly.
“An index of the discount economy fares across Australia’s top 70 domestic routes in November 2022 was more than double what it was in April 2022, when it hit an 11-year low. Flexible economy and business airfares have not increased as much as discount fares, and in November 2022 remained below pre-COVID-19 prices.”
In March 2023, the ACCC said that despite an increase in the number of seats sold by airlines, the load factors – or percentage of seats full – had decreased.
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says:The ‘dynamic’ has changed post COVID. More businesses are using videoconferencing so there’s less last minute business travel. With high interest rates, recreational travel is being squeezed, Trying to make up for the first by increasing prices for the second is simply not going to work. Unless pricing is adjusted, adding more capacity will just push load factors lower.