Qantas responds after ACCC finds major airfare price spike since Rex Airlines collapse

Qantas have hit out at the consumer watchdog’s report around the staggering hike in the price of domestic airfares since Rex Airlines’ collapse earlier this year.

Qantas have hit out at Australia’s consumer rights watchdog, following a scathing report that revealed how airfares have spiked by up to 95 per cent since Regional Express (Rex) fell into administration earlier this year.

Rex entered voluntary administration in July, shedding more than 600 jobs and casting serious doubt on its ability to keep regional Australia connected to the nation’s major cities.

An Australian Competition and Consumer Commission (ACCC) report released on Tuesday found the collapse has hit the wallets of Australians, who have been forking out more in the absence of lower cost carriers.

“The withdrawal of Rex from major city routes has meant passengers no longer have the lower cost options it provided,” the ACCC said.

The report found “an increase in best discount economy airfares from July 2024 to October 2024 across many major city routes Rex exited on 31 July 2024”.

The biggest spikes involved flights to Melbourne, with trips from Adelaide to Melbourne soaring by 95 per cent.

Melbourne to Gold Coast also jumped 70 per cent, while Canberra to Melbourne jumped 54 per cent.

The price of tickets for other less travelled routes also skyrocketed, with Canberra to Gold Coast jumping 171 per cent and Brisbane to Hamilton Island up 122 per cent.

Qantas Group have hit back at the ACCC report into domestic fare prices. Picture: NCA NewsWire/Jono Searle

In response to the report, Qantas unleashed on the findings — saying the report “does not reflect the average fares customers are actually paying.”

In a statement released on Tuesday afternoon, the Australian carrier argued the snapshot of fares fell at a time when the cost of a flight are “generally higher” due to the timing of school holidays (July and September) and other major events in Spring.

“The data is from the Government’s monthly fare monitoring which expressly states that it does not measure ‘average fares paid by passengers’,” the statement read.

“It is a snapshot of the lowest fares available to purchase on a particular day three weeks prior to travel and does not factor in events which may impact demand and fares.”

Qantas Group serviced 65 per cent of Australia’s domestic passengers in September, according to the ACCC. Picture: NewsWire / Gaye Gerard

Qantas claims the highlighted time frame in the report was 31 October, which is when Melbourne was hosting a major event - being the Coldplay concert.

“As such, demand was significantly higher on flights into Melbourne which means lower fares were snapped up early and the fares left available to purchase three weeks out were higher than usual,” the Group said.

“The average fare increase on these routes between July and October was significantly lower.

“If you look at fares in July to September this year compared to the same period last year, airfares across the industry have increased broadly in line with inflation. These increases were occurring while Bonza and Rex were still operating on domestic routes.”

The ACCC report painted a bleak picture for competition in Australia’s aviation industry.

“Since Rex entered voluntary administration in late July 2024, the domestic airline industry has become even more concentrated,” the ACCC said.

“Dominant market player, Qantas Group, serviced 65 per cent of Australia’s domestic passengers in September 2024 with either its Qantas or Jetstar brands, while Qantas Group and Virgin Australia combined serviced 98 per cent of passengers.”

The ACCC warned that it “may be some time before a new airline emerges to compete on the busy city routes, with normal barriers to entry and growth exacerbated by aircraft fleet supply chain issues and pilot and engineer shortages”.

The report came as the Albanese government announced it was throwing Rex an $80m lifeline after the debt-ridden carrier fell into administration earlier this year.

Infrastructure and Transport Minister Catherine King and Workplace Relations Minister Murray Watt said on Tuesday in a joint statement the financing would “support the business to continue offering critical services for regional communities”.

Rex airlines at Sydney domestic airport. Picture: NewsWire / Jeremy Piper

They said employees let go during the voluntary administration would get “early access” to the Fair Entitlements Guarantee, which offers Commonwealth-backed redundancy pay in dire situations.

“In addition, Rex’s administrators and main secured creditor PAG have advised they will pay the entitlements of former employees of the regional business who have been made redundant during the Voluntary Administration period,” the federal ministers said.

With Rex’s administrators hoping to extend the administration period until June 30, 2025, the government has committed to continuing “to guarantee ticket sales made throughout the voluntary administration” until the end of the extension.

“The guarantee has been effective so far, and has yet to be used with flight bookings holding up well,” Ms King and Mr Watt said.

“Today’s announcement is another demonstration of our commitment to maintaining regional aviation access, recognising the important role that Rex plays in regional communities right across Australia,” they said.

- with Vanessa Brown

Originally published as Qantas responds after ACCC finds major airfare price spike since Rex Airlines collapse