A report by the Australian Competition and Consumer Commission (ACCC) has revealed that millions of air travellers are to benefit from increased competition and cheaper airfares on Australia’s busiest routes as State and Territory borders reopen.
In a statement, the ACCC said its Airline competition in Australia – Report 6: December 2021 showed greater optimism among Australians that State and Territory borders would remain open had been driving renewed confidence to fly.
It said a choice of four airlines on the country’s busiest routes appeared to be putting downward pressure on airfares.
Chair of the ACCC, Rod Sims said Rex recently announced it would add Brisbane to its intercity network by mid-December, which meant it would be operating on Australia’s top five busiest routes connecting Sydney, Melbourne, Brisbane, Adelaide and the Gold Coast.
“Rex’s further expansion is welcome news for the millions of travellers who will soon have a choice of Qantas, Jetstar, Virgin or Rex on Australia’s five busiest routes,” Mr Sims said.
He said that, following Rex’s announcement, Virgin, Jetstar and Qantas all reduced their cheapest available fares on certain flights early in the New Year.
“We have already seen some significant reductions in airfares as a result of the increasing competition on major intercity routes and we expect there will be further downward pressure on prices as the airlines compete for passengers,” Mr Sims said.
He said the announcement from new low-cost leisure airline Bonza, that it would begin services from next year, was another significant development for domestic airline competition.
Mr Sims said Bonza, backed by an American investment firm, intended to fill a niche in the market by targeting unserved and under-served routes to regional centres, and planned to launch direct flights to destinations that currently required transit through a major city.
“Bonza’s announced entry as a new and independent low-cost carrier will no doubt be welcomed by regional communities,” he said.
“As Bonza announces its network, we will be alert to any anti-competitive capacity increases or pricing practices by the other airlines in response to the new competition,” Mr Sims said.
The ACCC’s 20-page Report can be accessed at this PS News link.
