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Domestic flight prices soar after Rex Airlines exit, finds ACCC

Published 12/11/2024, 12:10 pm
Updated 12/11/2024, 12:30 pm
© Reuters.  Domestic flight prices soar after Rex Airlines exit, finds ACCC
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Domestic airline fares have soared by as much as 95% since Rex Airlines went into voluntary administration in July 2024, while the number of seats available has fallen across major routes.

The Australian Competition and Consumer Commission (ACCC) has reported significant increases in domestic airfares following the exit of Rex from major domestic routes.

Latest ACCC analysis indicates that average prices on major city routes have risen by 13.3% since the budget airline suspended its operations.

Notably, the Adelaide to Melbourne route experienced a 95% surge, reaching A$296 for a one-way ticket, and the Melbourne to Gold Coast route climbed 70% to $432 one-way.

The withdrawal of Rex, and Bonza earlier this year, from major markets has led to a duopoly, with Qantas and Virgin Australia now accounting for 98% of all domestic passengers. This consolidation has also resulted in a 6% reduction in available seats between major cities.

The ACCC's report underscores the impact of reduced competition on airfare pricing and availability, highlighting the challenges consumers face in the current domestic airline market.

ACCC commissioner Anna Brakey said: “The exit of Rex as a third competing airline group on services between metropolitan cities may have significant longer-term impacts on the domestic aviation sector.

“The domestic airline industry has become even further concentrated, and it may be some time before a new airline emerges to compete on popular services between metropolitan cities, with normal barriers to entry and growth exacerbated by aircraft fleet supply chain issues and pilot and engineer shortages.”

Read more on Proactive Investors AU

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