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Growth in domestic capacity is not keeping up with surging passenger demand, the ACCC warns.
In its latest Domestic Airline Competition report, the consumer watchdog found flights on services between metropolitan cities were 90.4 per cent full in November 2024, the highest since January 2019, when the ACCC’s data began.
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Virgin Australia domestic passengers increased by 15.8 per cent from December 2023 to December 2024, with Jetstar up 11.8 per cent in the same period and Qantas increasing by a more modest 3.2 per cent.
“Despite some airlines increasing their seating capacity throughout the year, this was outstripped by the growth in passenger numbers, leading to fuller flights,” ACCC commissioner Anna Brakey said.
“While we recognise that delivery delays for new aircraft have presented significant challenges, we encourage all airlines to find other ways to increase their seating capacity to cater to the growing passenger demand.”
The Australian Airports Association (AAA) has called on airlines to bolster capacity, with CEO Simon Westaway saying the sector is under increasing strain.
“We’ve just experienced likely the busiest holiday period ever seen at our airports and aircraft capacity for intercity routes is stretched thin. The AAA joins the ACCC in urging airlines to increase seating capacity to meet rising demand,” Westaway said.
“The ACCC provides valuable insights into the airline industry for the flying public, which is why we’ve also called on the Federal Government to continue its quarterly airline monitoring reports beyond 2026.”
In better news for travellers, average airfares dropped three per cent between December 2023 and 2024, with average revenue per passenger on major city routes down 4.4 per cent, regional down 0.4 per cent, and remote down 2.3 per cent.
“Travellers had some relief from high airfares in December, after school holidays and other factors pushed up the average price of domestic travel in October and November,” Brakey said.
“The reduction in airfares is likely to have primarily benefitted business travellers, as high demand for leisure travel over the Christmas period often leads to a spike in the price of ‘best discount’ tickets.”
Cancellations are also on the decline, though flight delays are still an issue, with only 74.7 per cent of flights arriving on time in December.
Of flights during the month, 1.8 per cent of flights were cancelled, the third time in four months the cancellation rate was lower than the long-term average of 2.2 per cent.
According to the ACCC, the drop in cancellations is “primarily associated with Virgin Australia”, which cancelled just 0.6 per cent of flights in December, while Qantas had the highest cancellation rate at 2.7 per cent.
“Flight cancellations have been a real concern for passengers since the pandemic, so it is pleasing to see the improved performance in recent months by some airlines,” Brakey said.
“Virgin Australia, in particular, has reduced the frequency of cancellations across its network.”
The ACCC restarted its monitoring of domestic airline competition in November 2023.
