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Australian domestic airlines are using sales to try to entice passengers amid the current fuel and cost-of-living crises, an aviation expert has said.
Qantas Group and Virgin Australia are discounting more than 3.5 million airfares between them in major domestic sales, with Justin Brownjohn, senior manager at RMIT Aviation Academy, saying the carriers are aiming to reshuffle capacity and offset losses.
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“It is an interesting time to be operating an airline in Australia. In one part of the market, we have a large disruption to fuel oil supply chains causing the cost of jet fuel to increase rapidly,” he said.
“In another, there is a cost-of-living crisis causing the travelling public to rethink their well-deserved holidays, which is causing the discounting of fares.
“While there are, of course, supply and demand market forces at play, what we’re currently seeing is a little more nuanced. The nuance is coming from the addition of capacity adjustments.”
Qantas has slashed prices on more than two million seats across 90 routes on its network, while Virgin Australia is discounting more than 1.5 million fares; this is despite both major airline groups paring back capacity and increasing ticket prices as fuel costs spike.
According to Brownjohn, this is more than just a “simple sale to fill seats”, but rather a response to a complex operating environment.
“The Australian travelling public is used to seeing fares increase due to reduced capacity, but right now we are seeing airlines actively trying to attract passengers and feed them to parts of their network that are struggling,” he said.
“This is an attempt to shift capacity to ensure routes are sustainable to ride out the current turbulence but also to create availability elsewhere in the system where higher fares from more price-elastic consumers can be commanded to offset the losses elsewhere.
“There is a reason revenue management is sometimes called the dark arts of aviation. Available inventory is always being optimised to gain the most yield. Once a flight departs and that seat is empty, it is spoiled revenue the airline can never get back.”
It comes as airlines are facing “heightened energy supply uncertainty, logistics risks and renewed inflationary pressures” due to the Middle East conflict, with jet fuel a major concern.
“Jet fuel prices, which typically represent around 30 per cent of airline operating costs, increased around 80 per cent over the previous month, driving higher airfares and reduction in forward seat capacity by approximately three per cent over the next three months,” said Airservices Australia in its Australian Aviation Network Overview for March 2026.
“Combined with weaker consumer confidence, these factors are weighing on industry operating costs and near-term demand outlook.”
Australia had 30 days of jet fuel on hand as of last weekend, according to Energy Minister Chris Bowen.
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