The Australian Competition and Consumer Commission (ACCC) has released its latest Domestic Airline Competition report, revealing that passenger demand for domestic flights has surged throughout 2024, particularly during the Christmas period. Virgin Australia and Jetstar reported notable increases in passenger numbers, with Virgin Australia seeing a 15.8% rise and Jetstar a 11.2% increase compared to December 2023. Qantas also experienced growth, albeit at a lower rate of 3.2%.

Despite some airlines attempting to increase their seating capacity, the growth in passenger numbers has outpaced these efforts, resulting in fuller flights. In November 2024, flights between major metropolitan cities were recorded at 90.4% full, marking the highest occupancy rate since January 2019. ACCC Commissioner Anna Brakey emphasized the need for airlines to explore alternative methods to boost seating capacity to meet the rising demand.

The report also highlighted improvements in cancellation rates, with only 1.8% of flights cancelled in December 2024, which is better than the long-term average of 2.2%. Virgin Australia led the way with a cancellation rate of just 0.6%, while Qantas had the highest at 2.7%. Brakey noted the positive trend in cancellations, particularly for Virgin Australia, which has improved its performance significantly.

However, passengers still faced challenges with flight delays, as the on-time arrival rate across all airlines was only 74.7% in December 2024. Rex Airlines had the best on-time performance at 75.9%, while Jetstar lagged behind with 73.3% of flights arriving on time.

In terms of pricing, average airfares stabilized in December 2024, showing a 3.0% decrease compared to December 2023. The decline was more pronounced on major city routes, where fares dropped by 4.4%. This reduction in airfares provided some relief to travelers, especially business travelers, following a spike in prices during the peak holiday season.

The report also included a historical analysis of the domestic airline competition landscape over the past 30 years, noting periods of intense competition that benefitted consumers through lower fares and improved service quality. The ACCC has been directed to monitor the domestic air passenger transport market for three years, focusing on prices, costs, and profits.