Qantas and Virgin Dominate Market as ACCC Calls for Cheaper Airfares

The Australian Competition & Consumer Commission (ACCC) says consumers are not well served by domestic airlines due to the market domination of Qantas and Virgin.

The ACCC has released its final Airline Competition in Australia report, showing that a lack of effective competition in the domestic airline market has resulted in higher airfares.

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In the past two decades, Qantas Group and Virgin Australia have continued to dominate the market, with over 90 per cent of domestic passengers opting for these two airline groups.

By April this year, these two airline groups flew 94 per cent of all domestic passengers.

Findings showed that the total seat capacity across all airlines in April 2023 was six million, which was 93 per cent of the pre-pandemic levels.

ACCC Chair Gina Cass-Gottlieb said: “Domestic aviation is one of the most concentrated industries in Australia, barring only natural monopolies such as electricity grids and rail networks.”

“The pent-up demand for air travel that characterised the industry for most of last year is starting to ease,” Ms Cass-Gottlieb said.

“Consumers appear to have become more price-sensitive as cost-of-living pressures have increased,” she added.

The report has also found that expanding new airlines, such as Rex and Bonza, has created an opportunity for the domestic airline industry to enter a more competitive period.

Although the positive development Rex and Bonza brought to the competition, Ms Cass-Gottlieb said their share market was small, and there would be barriers to growth.

“While our airline monitoring direction is ending, we’ll continue to watch for anti-competitive behaviour and unfair business practices in the airline industry.”

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