The consumer watchdog has said it will closely monitor airlines as they continue to hold back from adding capacity to the market, contributing to some airfares more than doubling when compared to pre-pandemic prices.
In its latest Airline Competition in Australia report, the Australian Competition and Consumer Commission (ACCC) found capacity was not keeping up with demand, and average airfares were higher than they have been in years.
"The ACCC would be concerned if the airlines withheld capacity in order to keep airfares high," the report said.
Airlines are keeping additional crew and aircraft on stand-by to help manage disruptions.
Qantas is operating at about 95 per cent of pre-COVID levels. Virgin said it hoped to be back to 100 per cent in December and January.
"Aviation is still recovering from COVID," Andrew McGinnes, Qantas's group executive of corporate affairs, told ABC's 7.30.
"There are structural issues that we have around sick leave, around supply chain. That means we need more resilience.
"The way we get that is by reducing capacity."
'Very much about supply and demand'
Analysis of government data by the ACCC found that, in November, the cheapest economy return fares on in excess of 10 routes were more than double what they were back in 2019, before the pandemic. Since the cost of a return flight:
- from Melbourne to Perth increased by 146 per cent, from $439 to $1078
- Adelaide to the Gold Coast was up from $374 to $958
- a round trip from Uluru to Sydney more than tripled, from $249 to $829.
"It really is very much about supply and demand," CAPA's centre for aviation chairman Peter Harbison told ABC's 7.30.
"These are not fares that are sustainable in the long run … We're already hearing a lot of people, this Christmas, talking about going by train or going by car, whereas previously they would have flown."
Mr Harbison expects fares to come down as airline capacity gets back to pre-COVID levels.
"It's probably going to be … another six months or so before we really do emerge into a new environment [that] is going to be relatively stable," he said.
'The prices are just extraordinary'
Sydney-based nurse Megan D'Cruz booked return flights with Qantas to Auckland for her young family back in August, paying $3,000.
Despite receiving confirmation of the booking on her phone, the fare was never deducted from her credit card and she was later told the booking had been cancelled.
Qantas suggested the family rebook the same flight but, by then, the cost had increased to around $8,000.
"The prices are just extraordinary. They're just going up and up and up. It's just unrealistic for us to pay that money," Ms D'Cruz said.
"Flying is the only way for us to see our family, and it's very important for us to still travel."
After ABC's 7.30 contacted Qantas about the D'Cruz's flights to New Zealand, the issue was resolved, and they're now booked on a flight for the same price they would have paid back in August.
"The advice to consumers is book as early as you can," Qantas's Mr McGinnes said.
"That's the best way to get the best fee you can."
Watch ABC's 7.30, Mondays to Thursdays 7.30pm on ABC iview and ABC TV.
