Domestic airfares shot up following the and, a new report by the Australian Competition and Consumer Commission (ACCC) reveals.
Here are the other takeaways from the major report into domestic airline competition in Australia, released on Tuesday.
Rex's collapse had a big impact
After and cancelled its flights between capital cities, flight prices surged on these routes.
Qantas and Virgin charged customers more because they no longer had competition, the ACCC said.
Prices for the Adelaide to Melbourne route rose 95 per cent, the Melbourne to Gold Coast route went up 70 per cent and Canberra to Melbourne ticket prices increased 54 per cent.
Real average revenue per passenger on these routes increased by 13.3 per cent between July and September.
The increase also coincided with an increase in seasonal demand during September and fuller flights.
The number of seats available on major capital city routes fell by 6 per cent when Rex left the market. However passenger numbers have remained relatively stable, meaning flights are fuller, the ACCC found.
Costs will continue to stay high without additional carriers
The report warns Rex exiting the capital city market "may also have significant lasting impacts on the domestic aviation sector", as Qantas and Virgin (which currently have two-thirds and one-third of the market share, respectively) would have no incentive to lower prices without a competitor.
A Treasury working paper found the presence of an additional airline on a route can reduce airfares by 5 to 10 per cent.
Also, with each additional airline added, prices fall further — sometimes more than 15 per cent.
When a route is serviced by a monopoly carrier, passengers pay about 40c per kilometre, falling to 28c when two airlines are present and 19c for three airlines.
Qantas the worst airline for cancellations
Flight cancellations and delays have fluctuated in the last 12 months.
At 2.1 per cent in May, the industry average cancellation rate outperformed the long-term industry average cancellation rate of 2.2 per cent for the first time since October 2020.
The industry average cancellation rate worsened to 3 per cent in July, but has since improved to 2 per cent in September.
Qantas was the only airline to perform worse than the industry average, recording a cancellation rate of 2.8 per cent in September.
Rex flights were the most commonly on-time in September, at 76.6 per cent, followed by Qantas at 76 per cent, Jetstar at 74 per cent and Virgin Australia had the least flights on time at 73 per cent.
The industry average on-time arrival rate has improved slightly, from 71.1 per cent in July to 75.5 per cent in September. However, this is still worse than the long-term average of 80.8 per cent.
Passenger numbers still below-pandemic levels on some routes
Melbourne to Sydney continues to be the busiest route with over 614,000 passengers, representing 12.5 per cent of all domestic passengers.
On the most popular, so-called Golden Triangle routes connecting Brisbane, Melbourne, and Sydney, passenger numbers have increased with two of the three routes exceeding September 2023 levels.
However, when comparing September 2024 to September 2019, only seven routes exceeded 100 per cent of pre-pandemic passenger levels, including six routes to and from the Gold Coast, and Perth.
None of the Golden Triangle routes are above this level.
International travel is surging
More people are travelling internationally and prices are getting cheaper, the review notes.
The cost of an international economy airfare departing Australia decreased on average by 5 to 10 per cent between July–September 2023 and July–September 2024.
Flights to the United Arab Emirates, Qatar, France, the United Kingdom, and Italy had the largest decrease in fares.
The Australian Bureau of Statistics shows total arrivals and departures to and from Australia increased by 7.2 per cent and 11.7 per cent respectively in the 12 months to August 2024.
Short-term arrivals into Australia increased by 9.2 per cent over this period, with all states and territories experiencing growth, in particular South Australia and Western Australia.
In response to the growth in international travel demand, several Asian-based airlines, including Philippine Airlines and Thai Airways, have increased their Australian capacity beyond pre-pandemic levels and see potential for further expansion.
