Sydney, Feb 13: Domestic air travelers in Australia experienced a welcomed decrease in airfares last year after record highs in late 2022, according to the latest findings from the Australian Competition and Consumer Commission (ACCC).
However, persisting cancellations and delays continue to plague the industry, remaining higher than long-term averages.
Released today, the ACCC’s report on Domestic Airline Competition in Australia highlights a 13.4 percent decrease in average revenue per passenger in real terms in December 2023 compared to the same period in 2022.
This reduction is attributed to factors including cheaper jet fuel prices and a slight decrease in demand for domestic air travel.
“While travelers saw some relief from high airfares last year, concerns over service reliability persist,” stated ACCC Chair Gina Cass-Gottlieb.
“The industry continues to grapple with cancellations and delays, far exceeding long-term averages.”
In December 2023, five percent of flights were cancelled, more than double the long-term average, with only 63.6 percent of flights arriving on time, compared to the historical average of 81.1 percent. Airservices Australia has acknowledged a shortage of air traffic controllers as contributing to this performance.
Despite these challenges, the report indicates stabilization in passenger levels and capacity within the domestic airline industry.
Approximately 4.8 million people flew domestically in December 2023, representing 94 percent of pre-pandemic levels, with passenger rates consistently hovering between 90 and 95 percent since December 2022.
Furthermore, seat capacity reached six million in December 2023, equating to 95 percent of December 2019 levels.
The report also highlights increased competition on domestic routes, with the entry of new low-cost carrier Bonza in November 2023, marking the first time four airline groups competed on a single domestic route in Australia.
However, market concentration remains high, with Qantas and Jetstar continuing to dominate with over 60 percent of domestic passengers.
“The entry of Bonza and other players on key routes underscores the benefits of increased competition for consumers,” noted Cass-Gottlieb.
“However, market concentration remains a concern.”
This report marks the first under the ACCC’s reinstated domestic airline monitoring direction, aimed at ensuring fair competition and transparency in the industry.
The ACCC continues to monitor market trends closely, with a commitment to addressing any inappropriate market conduct and supporting the growth of new and expanding airlines.
For further information and access to the full report, please visit the ACCC website.
Media & PR: editor@dailystraits.com. Copyright 2021–Present DailyStraits.com. All rights reserved.