‘Are Aussies just printing money out there?’: Qantas’ jaw-dropping $1k Melbourne to Sydney economy fare
How is it that our national carrier is charging over a grand to fly one-way on one of the world’s most popular routes?
Last week my colleague searched for a flight from Sydney to Melbourne on a Wednesday evening.
It wasn’t for a last-minute booking (she was searching two weeks in advance). It wasn’t for Christmas Eve. It wasn’t a rare or premium route like Sydney to Broome (quite the contrary - Sydney to Melbourne is one of the world’s busiest routes).
So you can imagine her shock when the Qantas search turned up a one-way economy fare for $1049.
Fast forward to today and on that same route (just reversed) and things are looking just as grim.
Just 24 hours after Australia's sellout Grand Prix event came to a close - flight prices were about as inflated as we've ever seen.
Those trying to flee Melbourne 24 hours after the F1 finished were facing prices upwards of $750 if flying with Jetstar or $1100 with Qantas (all ex Tullamarine).
48 hours after the big event, prices are still red hot across the board, with Qantas fares starting at $1100 one way and Jetstar fares above $700.
For a little context, at the time of writing, you can fly from Sydney to Vietnam for around the same cost in business class.
Angus Kidman, editor at large at Finder bemoans the situation, saying “domestic airfares remain irritatingly high.
“Qantas can get away with this [style of pricing] because some business travellers don't care what they pay and will cough up thousands for a last-minute trip,” he says.
“This is also why you rarely see rewards seats in first class - Qantas knows those travellers might choose to travel at the last minute and will have the cash to do so, so it's not worth giving the seat to someone else”.
The cost of Qantas domestic fares often stuns international visitors
On the Reddit Qantas Frequent Flyer page, an overseas visitor asks the question “how does anyone afford to fly Qantas in Australia”?
“I'm looking to visit Australia for a bit, and am trying to hop around a few cities here, and the price of Qantas flights seem a bit absurd to me,” he writes.
“How can Qantas be charging these absurd prices to everyone? I'm not here to compare countries, but as an American, I'm shocked any can afford these prices, or are Ozzies just printing money out here. Is there some pricing thing I'm missing here, or are Qantas fares really that high?”
A reply to that question a local Reddit user responds: “SYDMEL is one of the highest traffic city pairs in the world. They charge that much simply because they can.
“We are bereft of competition in the airline sector and QF dominates for business travel where they are more than happy to pay high airfares to attend meetings etc. Qantas doesn't need to lower its prices, as it is getting the loads it wants”.
When Qantas was asked about the price of this particular airfare, they provided this background information
* Sydney-Melbourne is the busiest domestic route in Australia, with high-demand seen year-round. As with all routes, the cheapest fares sell out early, with fares increasing as seat availability reduces.
* Key events affect demand and with the AusGP in Melbourne that weekend, flights are much fuller than normal.
* The 1845 flight on 12 March in question is 95 per cent full, hence the elevated pricing. It is also the second last Qantas flight of the day which can be a more popular option for people who want a later flight, but don’t wish to take the last flight of the day.
Escape asked Rico Merkert, professor of operations and supply chain management at the University of Sydney, what he makes of the $1K midweek Syd > Melbourne Qantas flight price.
“While this is quite a jump in prices, it is not uncommon for airlines to deploy dynamic pricing,” he explains.
“People with a low price elasticity (typically business travellers who do not need to pay for the ticket themselves) who want to grab that last couple of seats available on that flight may want to pay the $1,049.
“Anyone else will jump on the (cheaper) plane that departs 15 minutes earlier or the one at 10.00pm”.
There are also other alternatives to the $1049 Qantas flight at that time on March 12. The price of a Virgin Australia economy fare from Sydney to Melbourne was $344 at the time of writing, and Jetstar was $205.
Technically, they’re not doing anything wrong
On the topic of airlines’ dynamic pricing, Merkert admitted to the ABC last year that it could ‘fall into the category of price gouging’.
However an ACCC spokesperson told Escape there’s nothing illegal about the practice:
“Some businesses increase their prices during periods of high demand. This practice is not illegal, but businesses must provide clear and upfront information about the price consumers will pay.
“The ACCC monitors the prices, costs, and profits of the major domestic airlines as part of a current government direction. However, the ACCC has no role in setting or regulating the price of airfares”.
Domestic airfares are rising in Australia, across the board
In February, the ACCC released a Domestic Airlines Competition Report showing that airline passengers are facing less choice and higher airfares following Rex’s exit from services between metropolitan cities.
Since Rex suspended operations on its services between metropolitan cities in July 2024, the average airfare on all major city routes increased by 13.3 per cent to September 2024.
“With less competition, there is less choice for consumers and less incentive for airlines to offer cheaper airfares and more reliable services,” ACCC Commissioner Anna Brakey said.
Domestic routes that have seen the biggest spike in airfares
The report found that airfares for ‘best discount economy’ tickets have increased from July 2024 to October 2024 across many of the services between metropolitan cities that Rex no longer operates on.
Most notably this includes services from Adelaide to Melbourne (up 95 per cent to $296), Melbourne to the Gold Coast (up 70 per cent to $432) and Canberra to Melbourne (up 54 per cent to $298).
Will there be any relief?
“I don't think we'll see any major changes here in the future,” says Angus Kidman from Finder.
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“We're still keen to travel - Finder research shows 14 million Australians plan to travel this year, and we're still willing to pay those fares.
“But alas, the days of Qantas having any fares under $100, even in a sale, have passed.
“It's leaving that territory to Jetstar, where we do still see $29 base fares popping up”.
Originally published as ‘Are Aussies just printing money out there?’: Qantas’ jaw-dropping $1k Melbourne to Sydney economy fare
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