Australian Competition and Consumer Commission (ACCC) announced (29-Sep-2021) the following from its latest ‘Airline Competition in Australia’ report:
- Passenger numbers in Jul-2021 declined to 23% of pre pandemic levels after recovering to a peak of 68% of pre pandemic levels in Apr-2021. Passenger numbers reported for Aug-2021 and Sep-2021 are expected to be even lower;
- Qantas Airways, Jetstar Airways, Virgin Australia and Regional Express (Rex) combined were forced to cancel one in three flights in Jul-2021, the highest cancellation rate since Apr-2020;
- Weekly passenger numbers in Victoria fell 91% from mid May-2021 to early Jun-2021 and in NSW they dropped 97% between mid Jun-2021 and the end of Jul-2021;
- While air services fulfil an important role keeping regional communities connected with the rest of Australia, the need for airlines to recover their operating costs from a smaller number of passengers often results in higher airfares. ACCC chair Rod Sims stated: “Passengers on regional routes are less likely to experience the benefits of competition between multiple airlines, and regional communities can face higher airfares than those travelling on busier routes”;
- On routes connecting larger cities to regional locations, the Qantas Group carried 70% of passengers in Jun-2021, up from 63% pre-pandemic. The group also carried around nine in every 10 passengers travelling between two regional locations;
- Virgin’s competitive strategy continues to evolve, including its approach to the corporate travel market. A recent industry study found that average domestic corporate airfares offered by Virgin were lower than Qantas, and the gap between the two had widened;
- The ACCC will continue to monitor Virgin’s strategic shift towards more value conscious travellers, and whether it may result in Qantas facing less competition at the premium end of the market.