The Australian Competition and Consumer C’ommission’ss latest domestic airline competition report atest domestic airline competition report shows improved conditions for consumers with declines in airfares, reduced cancellations and improved on time rates for flights over the first half of 2024.

“However, the ACCC cautions that consumers may miss out on the benefits of a more competitive domestic airline market if Rex is unable to re-commence its services between metropolitan cities,” the Commission notes, adding that “Rex continues to provide important connectivity to communities across 33 regional and remote routes and the government has announced that it will guarantee regional flight bookings for Rex customers throughout the voluntary administration process.”

The ACCC notes that the collapse of Bonza and withdrawal of Rex from routes between metropolitan cities means that, as of July 2024, no domestic route has more than two competing airline groups.

“In June 2024, Rex had accounted for about five per cent of domestic passengers and flew 44 routes across 56 destinations in Australia.

“While Bonza and Rex provided relatively limited capacity on these metropolitan competing routes, the exit of both airlines on these routes may mean that consumers face higher airfares and reduced choice for domestic travel.”

“Consumers generally enjoy lower airfares where there is more competition on a route. With the suspension of Rex’s services between metropolitan cities, we are closely monitoring airfares and remain vigilant to any increases in prices on routes that Rex is no longer flying on,” ACCC Commissioner Anna Brakey said.

The ACCC says that between November 2023 and April 2024, for the first time in Australia, there was a route with four competing airline groups (between Melbourne and the Gold Coast) - and in June 2024, routes serviced by three airline groups represented 50 per cent of domestic passengers.

“Compared to their 2019 levels, airfares on routes with increased competition have been lower than the broader domestic network in every month since February 2023, indicating that increased competition has resulted in lower airfares for consumers.

“A competitive aviation sector is important to all Australians and the ACCC remains engaged with stakeholders so that we can understand and protect competition in this sector., the Commission said.

“The concentrated nature of Australia’s domestic aviation industry reinforces the importance of the ongoing transparency and scrutiny we bring through our monitoring role,” Commissioner Brakey concluded.