Qantas and Virgin duopoly dwarfs the Australian banking and supermarket industries, airport peak body says

Qantas and Virgin now account for 95% of Australia’s domestic aviation market, a dominance that dwarfs industries such as banking and supermarkets and has allowed the airlines to jack up profit margins, the national airport body has warned. The continued duopoly of Qantas Group – which includes budget carrier Jetstar – and Virgin Australia in the domestic aviation sector has also allowed air fares to rise above pre-pandemic levels even when adjusting for inflation, the Australian Airports Association (AAA) said in its submission to a parliamentary inquiry. Domestic air fares in Australia have increased by 22.6% between 2019 and 2022, the AAA said, with an increase of 19.3% between the first quarters of 2020 and 2023. Airlines have been increasing air fares despite the price of jet fuel falling. Prices dropped to US$137 a barrel in May, down from the high of $US259 in June 2022, after the invasion of Ukraine when airlines cited the high cost of fuel to justify record ticket prices. The AAA said despite cheaper jet fuel, and airport charges increasing by just 3% between 2019 and 2022, Australian domestic air fares were still high. Meanwhile, without meaningful competition, the two airline giants have had little incentive to improve on time performances, with the AAA noting cancellation and delay rates have regressed. The AAA said domestic on-time performance for April 2023 was 71.8%, “well below the long-term industry average” of 81.5%.It raised concern at Qantas and Virgin’s market share, but was most concerned with Qantas’ dominance – now 66% of domestic aviation – especially after the pandemic when Virgin went into receivership and emerged with new owners.<br/>