The Australian Competition and Consumer Commission (ACCC) has released its latest Domestic Airline Competition report, revealing that while passenger numbers have returned to pre-pandemic levels, the seating capacity provided by domestic airlines has not kept pace. In June 2025, the total number of seats flown by major airlines was 2.8% lower than in June 2019, primarily due to the exit of Tigerair from the market in 2020, which significantly reduced low-cost travel options.

Despite a 12.3% decrease in jet fuel prices over the past year, average airfares have risen slightly, indicating that the lack of competition and sufficient capacity is likely causing consumers to pay more. Although Qantas Group and Virgin Australia have increased their capacity since 2019, it has not been enough to fill the gap left by Tigerair's departure. Additionally, Rex has reduced its capacity on regional services.

On a positive note, the report highlights improvements in service reliability, with domestic flights achieving an on-time performance rate of 82.4% in April 2025, surpassing the long-term industry average. Virgin Australia recorded the best on-time arrival rates since February 2022, reflecting a collective effort by airlines and air traffic controllers to enhance reliability.

Cancellation rates have also improved, with both Jetstar and Virgin Australia maintaining low cancellation rates in April and May 2025. However, Qantas continues to have a higher cancellation rate compared to its competitors. The ACCC plans to monitor these rates closely to ensure improvements are made where necessary.

The report also includes an analysis of frequent flyer programs, which are significant revenue sources for airlines. While these programs offer benefits, consumers are advised to consider potential drawbacks, such as points devaluation and expiration. The ACCC encourages consumers to weigh the value of frequent flyer points against flight costs when making travel decisions.

In response to the ongoing challenges in the domestic airline market, the ACCC has been directed by the Treasurer to monitor prices, costs, and profits in the domestic air passenger transport sector for the next three years, reporting quarterly on its findings.