Domestic Airfare Prices Soar in 3 Months Since Collapse of Regional Airline

A fisherman stands on rocks as Qantas Airlines and Virgin Australia Airways planes travel down the runway at Sydney International Airport on June 7, 2024. (Photo by DAVID GRAY / AFP) Photo by DAVID GRAY/AFP via Getty Images

The cost of cheaper to mid-range domestic airfares have soared in the past three months after the collapse of regional airlines Rex in July, according to the Bureau of Infrastructure and Transport Research Economics (BITRE).

BITRE compiles a monthly survey of airfare prices from internet booking sites.

According to its “best discount airfare” price index—a measure of the average cheapest air tickets—there was an increase from 57.5 points in July, to 70 in September 2024—21.7 percent increase.

Restricted economy fares soared from 81.3 to 93.6 in September—a 15.1 percentage change, according to BITRE.

On the other hand, there was little movement in the more expensive business class flights with a slight increase from 62.2 to 63.5.

Minister Says Overall Prices Trending Downward

In response to the data, Minister for Transport Catherine King said prices overall had dropped.

“Fares today are well down from their 2022 peaks, are lower than pre-COVID, and are in line with long-term trends,” King said in a statement provided to The Epoch Times.

“The ACCC has made it clear that they are closely monitoring airfares and are vigilant to other carriers increasing fares on routes where Rex is no longer operating.”

The minister said that if Qantas or Virgin misused their power they could “expect to be caught.”

“As laid out in the Aviation White Paper, the Albanese government will continue to take action to drive competition and better consumer outcomes through our reforms to Sydney Airport slots, consumer rights initiatives, boosting bilateral agreements to add flights to Australia, and the construction of Western Sydney Airport,” King said.

Over the long term, the BITRE price index for the absolute best discount fare reached a peak of 111.3 in December 2022, consistent with the Minister’s comments.

Opposition Says Government Not Doing Enough

Meanwhile her opposition counterpart, Senator Bridget McKenzie, said the government was not doing enough to address competition.

“We need more competition not less and Labor is doing nothing to help Australian travellers. Labor needs to stop running a protection racket and start backing travellers with reforms to aviation,” she said on X.

Previously, the Nationals senator urged the government to consider forcing the national carrier to sell its budget airline, Jetstar, but later walked back those comments as they had not become formal party policy.

“In my opinion piece in the AFR that I hope you have all read, I explicitly rule out needing to break up Jetstar and Qantas,” she said.

Qantas Says Airfares Have Remained Relatively Flat

A Qantas spokesperson told The Epoch Times that domestic airfares had remained relatively flat since April and were lower this time last year when adjusted for inflation.

“The data in the BITRE report does not represent average fares which customers are paying to fly domestically,” the spokesperson said.

“Qantas and Jetstar have regular sales fares with Jetstar offering $67 fares between Melbourne and Hobart while Qantas has fares for $139 between Sydney and Ballina.”

Qantas noted that airfares are seasonal, as customers generally pay a bit more in September than they do in August during the busy school holiday period.

Where Do Airfares Sit Now?

An analysis of Google Flights shows a Jetstar flight from Sydney to Brisbane available for $74 on Wednesday, Sept. 18, at 6 a.m. The next cheapest flight is $108 with Virgin. At the time of writing, the lowest Qantas flight on that day is $166.

However, the best deal on Saturday, Sept. 21, is $175 for a one-way flight at 6 a.m. with Jetstar, $250 with Virgin, and $267 with Qantas amid football finals season.

Looking at another time point, the lowest fare from Sydney to Brisbane on Oct. 19 is $108 with Jetstar, $138 with Virgi,n and $166 with Qantas at the time of writing.

Rex had previously offered airfares as low as $87 for a flight between Brisbane and Sydney, including luggage while in operation, which Virgin matched.

In addition, while Rex was operating, it competed directly with Virgin on price and service, while forcing Jetstar to lower its pricing.

How was the Fare Data Calculated?

The index from BITRE was derived from a monthly survey of airline internet booking sites, reflecting the lowest available fare.

“Fares are recorded only when they are available on the nominated day of travel (the last Thursday of the month),” the government agency said.

“The series is a price index of the lowest available fare in each fare class, weighted over selected routes. It does not measure real airline yields or average fares paid by passengers.”

The Epoch Times has also contacted Virgin and the Australian Competition and Consumer Commission for comment.

Alfred Bui contributed to this report.