The Australian Competition and Consumer Commission (ACCC) has released its latest Domestic Airline Competition report, highlighting a significant increase in domestic air travel demand during September and October 2025. The report indicates that domestic airlines carried over 5.5 million passengers in October 2025, marking a 3.8% increase compared to the same month in 2024.

ACCC Commissioner Anna Brakey noted that the presence of interstate teams in the AFL and NRL finals contributed to the heightened demand for travel to major cities like Melbourne and Sydney. In response, the Qantas Group and Virgin Australia added over 45 additional flights to accommodate this surge, resulting in a 4.5% increase in seating capacity for domestic routes.

Despite the increase in flights, the high demand led to fuller flights, with 84.4% of available seats occupied in October 2025, surpassing the 12-month average of 81.6%. Consequently, average airfares rose to their highest levels since December 2022, reflecting a 3.2% increase from October 2024.

In a related development, Air T's acquisition of Rex is expected to maintain regional connectivity, as Rex had entered voluntary administration in July 2024. Air T plans to continue operating Rex's existing regional routes and restore its pre-pandemic network, ensuring competition and service continuity for consumers.

However, the report also noted a decline in on-time performance for domestic flights in October due to adverse weather conditions, with only 74.1% of flights arriving on time. The industry cancellation rate remained consistent with long-term averages.

The financial results for Qantas Group and Virgin Australia indicate strong passenger demand, with both airlines achieving profitable earnings for three consecutive years. The report highlights the high barriers to entry in the domestic aviation sector, which have limited competition, particularly after Rex's withdrawal from major city routes. The Qantas Group and Virgin Australia now dominate approximately 98% of the domestic airline market.

In conclusion, the ACCC emphasizes the need for increased competition in the domestic airline industry to provide consumers with lower airfares and more choices.