Australian Domestic airfares – cheapest in last 5 years
The Australian Competition and Consumer Commission reported yesterday, that domestic airfares have never been lower in the last 5 years as they are now. With international and domestic borders in the main becoming easier to cross, airlines are competing to retain or regain their pre-COVDID-19 market share. Qantas (inc. Jetstar) wants 70%; Virgin wants to claim 33% and scheduled upstart Bonza, is looking at taking a piece of the action as well.
The ACCC report highlights the following:
- Airlines increasing flights as domestic borders reopen. Peak summer period arrives as state and territory borders reopen. 40% of Virgin’s bookings made more than 60 days in advance. Qantas’ domestic bookings in early November increased 25 times compared over the last few months.
- BONZA – new airline to start in 2nd quarter of 2022 – travellers to benefit from greater choice and route connectivity when new low-cost airline commences services operating low frequency services on unserved or underserved routes. ACCC will be alert to any anti-competitive capacity increases or pricing practices by the other airlines.
- Rex adds intercity flights from Brisbane – From mid-December Rex will expand into Brisbane–Sydney and Brisbane–Melbourne, Australia’s second and third busiest routes. Consumers will benefit from competition between 3 airline groups with Jetstar, Virgin and Qantas all dropping their airfares on the Brisbane routes.
- Regional centres benefit from new direct routes – including connections between regional centres: Launceston–Perth and Launceston–the Gold Coast and Adelaide–Newcastle and Wagga Wagga–Brisbane from March 2022.
- COVID-19 has left Airlines with a huge losses. AU$4 billion in losses after tax over in last 10 years, mostly due to COVID-19. Qantas and Rex were profitable prior to the pandemic.
The report came out just after the arrival of the Omicron variant, which saw border restrictions both international and domestic tighten. Although the Airline industry is on a takeoff to recovery – it has not quite reached cruising height – if you will forgive the obvious metaphor. Testing, monitoring, and to a much lesser extent mask-wearing are still impediments to domestic and international travel. Anecdotally (me and my friends) are resisting the frequency of travel we were used to pre-COVID-19. Travel has turned into a palaver of testing and risk. At the moment, you even risk that the rules will change while you are in the air – even on a domestic flight.
Is this the new normal for flying?