Grim watchdog report exposes shocking airline price hike

A grim new report has revealed the staggering price increase Aussies have copped from the embattled airline industry.

Australian airlines have increased the price of cheap airfares by more than half despite having the worst on-time performance on record, a grim consumer watchdog report has found.

The quarterly Australian Competition and Consumer Commission review showed the cheapest economy airfares were 56 per cent higher in August 2022 after hitting an 11-year-low in April 2022.

“After about 18 months of historically low airfares, the cost of domestic flying has risen sharply in response to strong demand, temporary capacity reductions and very high jet fuel prices,” ACCC chair Gina Cass-Gottlieb said.

“Discount economy airfares in August were at their highest point in almost two years.”

ACCC graph on airline prices.

Around 4.7 million passengers flew domestically in July as pent-up demand for travel, particularly from the southern states, created challenges for an unprepared industry.

“The aviation industry was not well placed for the return of passengers. Reduced workforces, high levels of staff illness and extreme weather events led to significant operational challenges across the aviation supply chain,” the report said.

It resulted in the worst-on time performance on record as well as cancellation rates more than three times the long-term average.

“We are aware that for many consumers, long-awaited travel fell well short of expectations with record delays, very high rates of cancellations, lost baggage, and long wait times for call centres,” Ms Cass-Gottlieb said.

Australian domestic air services in the last two years.

“We have been engaging closely with airlines to understand the source of these problems.”

Rex performed significantly better than the other airlines in terms of punctuality and the rate of cancellations. It attributed this success to keeping its staff despite reduced flying in the last two years.

In July 2022, 82 per cent of airline seats were filled, while many routes to northern Australia surpassed 90 per cent.

But the ACCC noted demand on routes between Canberra, Melbourne and Sydney lagged behind, in part due to the slower recovery of corporate and business travel.

Jetstar carried 23 per cent of all domestic passengers in July, down from 28 per cent in April.

Qantas carried 39 per cent of passengers in July compared with 33 per cent for Virgin and 5 per cent for Rex.