Domestic airfares have soared to the highest in almost two years as airlines struggled with staffing shortages and the soaring cost of jet fuel, a report by the consumer watchdog shows.
The Australian Competition and Consumer Commission’s latest Airline Competition in Australia report says the cheapest economy airfares cost 56 per cent more in August than in April, when they were at an 11-year low, as the number of travellers recovered to almost pre-pandemic levels.
Prices have jumped even as passengers faced delays and flight cancellations across the country as carriers failed to cope with the bounce-back in demand.
The cost of domestic flights has increased by 56 per cent from July to August, with passengers finding it harder to find a new seat in the event of a cancellation. Credit:Flavio Brancaleone
“After about 18 months of historically low airfares, the cost of domestic flying has risen sharply in response to strong demand, temporary capacity reductions and very high jet fuel prices,” ACCC Chair Gina Cass-Gottlieb said in a statement on Wednesday.
“In these circumstances, more than ever, the level of competition between airlines is incredibly important to maintain pressure on ticket prices and service levels across the industry.”
About 4.7 million travellers flew domestically in July, the highest number since the start of the pandemic and just 11 per cent less than in July 2019. In June, the number of domestic passengers reached 97 per cent of the June passenger numbers in 2019.
Increased demand coupled with reduced capacity meant that 82 per cent of flights in peak periods were full. This has resulted in increased difficulty for passengers to find available seats on a new flight in the event of a cancellation, the consumer watchdog noted.
The ACCC monitors the prices, costs and profits of Australia’s domestic airline industry and provides quarterly reports to inform policy for the next three years, following a directive by former treasurer Josh Frydenberg in 2020.
The regulator also confirmed it’s investigating Qantas after customers reported difficulties in using flight credits, but did not comment further as the investigation is ongoing.
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