Aussie airlines point the finger at Coldplay and footy finals for high airfare prices

BY Nathan Jolly

November 13, 2024 9:13

Aussie airlines point the finger at Coldplay and footy finals for high airfare prices

Qantas Airways is pointing the finger at Coldplay for the unseasonably high airfares since the collapse of Rex Airlines, while Virgin is blaming football finals season.

The Australian Competition and Consumer Commission released a report this week on domestic airline competition in Australia, which found that prices had more than doubled on some routes since the collapse of Rex in July.

“The increase coincides with less competition after Rex’s exit from many of these routes, an increase in seasonal demand during September, and fuller flights,” the ACCC report found.

Between them, Qantas and its budget carrier, Jetstar, and Virgin carry 98% of domestic passengers, warning a third competitive airline was needed to avoid “higher airfares and reduced choice of consumers”.

The Albanese Government clearly agreed, handing Rex an $80 million bail out to extend its voluntary administration period to the end of June, 2025.

The ACCC report showed a 13.3% average increase in domestic fares since July. And while airfares from Canberra to Gold Coast jumped by 171%, and Brisbane to Hamilton Island leaped 122%, of particular interest was the 95% price jump for an Adelaide to Melbourne flight.Using these flights as an example, Qantas Domestic chief executive, Markus Svensson, argued the collapse of Rex and these recent price surges are unrelated, and the selected period used in the report compared a “snapshot of the lowest fares available” on a particular day in July, to the busy end of October – where four sold-out Coldplay concerts resulted in higher demand for tickets from Adelaide to Melbourne.

“The average fare increase on these routes between July and October was significantly lower,” he argued.

A Virgin spokesperson told the Herald the change in fares from July to September was driven by “football finals and school holidays”.

“September was one of our busiest schedules this year, with more than 11,500 flights operated across the Virgin Australia network,” the spokesperson said.

The report suggests otherwise, and makes for grim reading.

“Since Bonza went into liquidation and Rex withdrew from major domestic routes, there is no longer any route on Australia’s domestic network serviced by more than 2 major airline groups,” it reads.

“Qantas Group and Virgin Australia have since serviced 98% of domestic passengers. It may be some time before a new airline emerges as a serious third competitor, which is likely to result in higher airfares and reduced choice for consumers.”

The report points out that “Flight Centre’s FCM Travel and Corporate Traveller showed that the average cost of an international economy airfare departing from Australia decreased on average by 5–10% from July–September 2023 to July–September 2024.”

In addition, jet fuel, which the ACCC notes “will typically account for between 15% and 25% of an airline’s operating costs” has decreased in price by 41% since September 2023.

“This is the lowest price recorded for jet fuel since September 2021.”