Australians are paying more for domestic flights after the collapse of regional airlines Rex and Bonza, with prices on the Melbourne to Sydney route soaring.
Data from online travel agent Webjet shows the average booking price for a return ticket between Melbourne and Sydney jumped from $385 in late July to $537 in late October – up 39.5 per cent.
Passengers wait for their Qantas flights at Sydney’s domestic airport.Credit: Kate Geraghty
In the same period, the average booking price for a return ticket between Brisbane and Melbourne went from $490 to $760 – a rise of 55 per cent. Sydney to Brisbane return flights were 4 per cent pricier at an average of $437.
Rex, which racked up huge losses trying to compete on capital-city flights, collapsed in July – though it continues to fly to regional centres. Domestic airline Bonza entered voluntary administration in April.
That left Qantas Group and Virgin Australia with no competition on the nation’s busiest domestic routes.
“Between the two carriers, they do tend to set the prices, and they’re both interested in keeping the prices up,” said Flight Centre chief executive Graham Turner.
Average booking price of return flights booked on Webjet
At the end of the July:
- Melbourne to Sydney $385
- Sydney to Brisbane $420
- Brisbane to Melbourne $490
At the end of the October:
- Melbourne to Sydney $537
- Sydney to Brisbane $437
- Brisbane to Melbourne $760
“And, unfortunately, third carriers in Australia really struggle to get a toehold.”
Turner said prices also reflected strong demand. “If you’ve been on a plane lately, they’re generally full,” he said.
Bargain hunters are also feeling the pain.
Data from the Bureau of Infrastructure and Transport Research Economics (BITRE) shows the cheapest flight between Sydney and Melbourne in October last year was $129. This October, the cheapest option was $189 – up 46.5 per cent.
Flight Centre chief executive Graham Turner.Credit: Dan Peled
The lowest fare in October between Brisbane and Melbourne was $318 – 22.3 per cent more than a year ago. However, the cheapest Brisbane to Sydney flight was 8.2 per cent lower at $168.
Aviation expert Dr Ian Douglas said bargain fares had disappeared with Rex and Bonza.
“The cheaper prices are usually at quieter times: early morning, mid-afternoon or late evening. I doubt that Qantas or Virgin were ever the cheapest,” he said.
Business class flights prices increased 33.5 per cent in the year to October, while restricted economy prices were up 16.7 per cent. The cheapest domestic flights were 4.5 per cent pricier, BITRE said.
A Qantas Group spokesperson said domestic airfares had increased broadly in line with inflation since late last year.
“Qantas and Jetstar have regular sales fares, with recent offers seeing Jetstar have $69 fares between Melbourne and Brisbane, while Qantas had fares for $129 between Melbourne and Sydney,” they said.
A Virgin Australia spokesperson said the airline continued to offer frequent sales, and remained “focused on providing exceptional value and choice to Australian travellers”.
The airline had rebooked about 130,000 Rex passengers free of charge since its collapse, they said.
Turner said Qatar Airways’ proposed investment in Virgin would strengthen the local airline and boost competition.
“As time comes on, particularly if Qatar gets involved in Virgin, I think things will become more competitive,” he said.
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