QANTAS RESPONDS TO ISSUES RAISED IN ACTU REPORT ON COMPETITION

Sydney | Published on 7th February 2024 at 16:28

FARES

Qantas and Jetstar appreciate the importance of affordable air travel.

The fact is airfares have dropped significantly. Government data shows that average fares across the industry have declined from their December 2022 peak. (See graph below)

The temporary spike in fares post-COVID reflected reductions in capacity to improve operational resilience following the challenging restart of the industry once borders opened. These reductions coincided with a period of high demand and the imbalance pushed up fares across all airlines. At the same time, fuel prices increased by more than 60 per cent, driving fares higher again.

Sale fares are frequently available, with Qantas offering an average of 17 network-wide sales per year and Jetstar offering 10 million fares for less than $100 last year.

COMPETITION

Australia is one of the most liberalised aviation markets in the world. Unlike a lot of other jurisdictions, there are no restrictions on foreign carriers setting up domestic operations here.

While the domestic market is concentrated, it is still highly competitive. There are now four large jet operators, with Regional Express expanding onto mainline routes and the entry of Bonza.

Australia has Open Skies Agreements with key markets (including the US, UK, New Zealand and China) and consumers can choose from over 50 airlines that offer international services from Australia.

SLOTS

The Qantas Group has confirmed its broad support for reforms to the slot system at Sydney Airport as recommended by the Harris Review, and rejected suggestions it is hoarding slots. A one page explanation can be found here.

ON TIME PERFORMANCE

Qantas remains focused on getting customers to their destinations on time more often.

Qantas flights departed on time 74.1 per cent of the time in the 2023 calendar year, compared to 67.1 per cent for its major domestic competitor. Qantas cancelled 3.5 per cent of flights compared to 4.2 per cent for its major domestic competitor.

Qantas’ overall on time performance for 2023 was almost 5 percentage points better than the percentage of flights that departed on time in 2022. Qantas cancellations dropped by 1.5 per cent year on year.

DOMESTIC AIR FARES (BEST DISCOUNT)

Source: Bureau of Infrastructure and Transport Research Economics (BITRE) – Domestic Air Fares report