Domestic airline passengers face less choice and higher airfares due to significantly reduced competition. Focusing on the impact of recent events such as the exit of Rex from major routes and the collapse of Bonza, this report raises concerns about the potential long-term consequences for airfares, consumer choice and service reliability.

In 2023, in response to concerns about potential anti-competitive behaviour, the Australian Competition and Consumer Commission (ACCC) was directed to monitor prices, costs and profits in the domestic airline industry. This report uses data from the major airlines to assess industry trends, in particular, changes to the market since Bonza went into liquidation in March 2024 and Rex entered voluntary administration two months later. 

Key findings

• Since Rex entered voluntary administration in late July 2024, the domestic airline industry has become even more concentrated. 
• Dominant market player, Qantas Group, serviced 65% of domestic passengers in September 2024.
• Qantas Group and Virgin Australia combined serviced 98% of passengers.
• Other airlines have not sought to replace the capacity taken out of the sector by Rex. 
• Both airfares and average revenue per customer are trending upwards.
• Business and Restricted Economy fares have increased significantly compared to discount airfares. 
• Airline service reliability has fluctuated in recent months.