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Qantas has pointed the finger at Australia’s geography and population profile for its “highly concentrated” domestic aviation market.
In its submission to the Productivity Commission’s inquiry into regional airfares, the carrier said Australia has “one of the most liberalised aviation markets in the world” and suggested the government has a part to play in keeping the regions connected.
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“Unlike many comparable jurisdictions, Australia imposes no restrictions on foreign carriers establishing domestic operations here. Virgin Australia and Regional Express are both beneficiaries of these settings, as was Bonza,” the submission read.
“The Group acknowledges that the domestic aviation market is highly concentrated – though contends this is not a new phenomenon nor the result of competitor entry constraints, but rather a product of Australia’s geography and population profile.
“The Government recognises these structural characteristics and applies extensive regulatory oversight across the airline industry.
“This includes the active enforcement of competition and consumer protection laws, monitoring and information gathering powers, reformed slot management arrangements, and other regulatory controls designed to promote fair competition and protect consumers.”
While Qantas acknowledged it is the largest provider of regional air services in Australia, the Flying Kangaroo also noted that it is the sole operator on only 38 out of more than 100 domestic routes.
“In some regional markets, governments intervene directly to regulate services where passenger demand is insufficient, either via licencing or financial support,” the airline said.
“Examples include the Queensland Government’s ‘Long Distance Air Services’ program which regulates seven intra-Queensland routes; Qantas operates ‘Central 2’ from Brisbane to Longreach via Barcaldine and Blackall.
“Similarly, the New South Wales Government regulates services on routes from Sydney to Lord Howe Island and Moree, with Qantas operating services to Moree.
“These arrangements reflect the role of government intervention in maintaining air connectivity for regional and remote communities where market forces alone cannot sustain regular services.”
The ACCC’s figures in its own submission showed that there were 23 major city routes and 90 regional routes served by domestic carriers as of January 2026. The number of regional routes increased from 82 in January 2019 to 90 in January 2026, though 11 routes were dropped.
Qantas Group operated 82 regional and 26 remote routes in January this year, compared to 26 regional routes and 11 remote routes for Virgin, and 18 regional and 13 remote routes for Rex.
The two major carriers between them account for around 99 per cent of domestic flights.
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