The Australian Competition and Consumer Commission (ACCC) has announced that the domestic aviation sector has successfully recovered from the impact of COVID-19, with passenger levels and capacity now back to pre-pandemic levels.
According to the most recent Domestic Airline Competition in Australia report, 4.9 million domestic passengers traveled with Qantas, Virgin, Jetstar, Rex, and Bonza last March. This figure reflects 98.8 percent of the passenger levels recorded in March 2019, with seat capacity just slightly below pre-pandemic levels at 6.2 million.
Moreover, last February, domestic passenger numbers surpassed pre-COVID figures for the first time since the pandemic. This was attributed to several major entertainment events taking place across the country, including American singer-songwriter Taylor Swift’s concerts in Melbourne and Sydney and a WWE event in Perth.
“After four years of instability, the domestic airline industry has returned to more typical seasonal levels that were last seen before the pandemic,” said ACCC Commissioner Anna Brakey.
“The increase in airline seat capacity has contributed to lower airfares for consumers on domestic routes. We hope to see this trend continue as the airline industry returns to a more stable market.”
According to the ACCC, there was a decrease in domestic airfares and an improvement in network reliability in March.
The regulatory authority stated that average revenue per domestic passenger last March decreased year over year in both nominal terms and real terms by 1.4 percent and by 4.8 percent, respectively.
“The report found that airfares spiked on some routes in February, likely due to the high demand caused by multiple major events,” the ACCC said.
In March 2024, the industry saw a decrease in flight cancellations, with only 2.8 percent of flights being cancelled, showing an improvement from the 5 percent rate recorded in December 2023.
Additionally, the on-time performance across the industry rose to 77.2 percent in March 2024, an increase from the 63.6 percent recorded in December 2023.
The ACCC has recently published its second report on the domestic aviation industry, following a directive from the Albanese government to extend monitoring for another three years.
This decision was made after the previous monitoring regime, which was put in place by the Morrison government during the pandemic, came to an end in June.
Bonza’s Voluntary Administration Lessens Competition
Meanwhile, the ACCC noted that domestic flight travellers going to regional destinations will have fewer options if Bonza will not be able to resume operations after collapsing.“Since Bonza began operations, travellers benefited from more affordable airfares and the convenience of direct connections to various regional and holiday destinations otherwise not offered by other airlines,” Ms. Brakey said.
The suspension of Bonza’s operations will reduce the direct connections at the Maroochydore airport in Sunshine Coast from 14 to three and reduce to half the number of direct connections at the Coolangatta airport in Gold Coast.
However, the ACCC also emphasised that due to the airline’s small fleet size and exclusion of the busiest routes, it does not have more than 2 percent of market share.
“While Bonza’s impact on competition had been limited to date, its presence represented an opportunity for greater competition to emerge in the highly concentrated domestic aviation sector,” Ms. Brakey explained.
Appointed administrator Hall Chadwick has yet to announce in due course the decision for Bonza, whether it should trade out of administration, be sold to a new business, or be wound up.
