Research reveals that domestic airfares soared following the departure of regional carriers Rex and Bonza from capital city routes. The Bureau of Infrastructure and Transport index showed a 12.5% increase in the cost of the cheapest airfares after the collapse of Bonza in late April and Rex’s decision to axe capital city routes in August.
This surge resulted in cheaper fares rising from $150 to $170 and expensive fares from $350 to $400. Former ACCC boss Allan Fels noted the historical impact of competition on ticket prices, stating, “When there’s a third player in the industry prices go down, when they exit prices go up.”
Flight Centre CEO Graham Turner affirmed the current higher domestic airfares compared to a year ago, with economy fares showing a 7% to 14% increase. Additionally, Qantas is set to increase flight change fees from $99 to $199 in three weeks, contrasting the trend in more competitive markets like the US where such charges are often eliminated.