Australians are still paying significantly more for air travel than before the pandemic, with some routes more than twice as expensive as four years ago, but prices are starting to drop.
Lower fuel costs, more available seats on domestic routes and a drop in demand from the Christmas peak contributed to a 13 per cent decline in average prices in January, analysis by the Australian Competition and Consumer Commission found.
But the consumer watchdog says airfares are still 13 per cent above pre-pandemic levels in real terms, with discounted tickets 25 per cent higher than in February 2019.
The cheapest fares between Coffs Harbour and Sydney almost tripled over the period to $338, while flights from Adelaide to Melbourne and Adelaide to Brisbane doubled to $298 and $455, respectively.
However, economic factors should enable airlines to continue dropping fares in coming months, ACCC Commissioner Anna Brakey said.
After the Russian invasion of Ukraine sent oil prices to record highs in mid-2022, the price of jet fuel has declined by 35 per cent and continues to trend down.
While 5.9 million seats were made available in January, the highest in more than six months, only 4.4 million passengers flew within Australia, an 11 per cent reduction on pre-pandemic levels.
In more good news for travellers, delays and cancellations also fell, with 23.9 per cent of flights arriving late, down from 25.8 per cent in December.
The cancellation rate was more steady at 3.1 per cent.
"The airlines generally managed to increase their levels of flying without significantly compromising their on-time performance," Ms Brakey said.
However, the rate of delays and cancellations both remain above long-term averages of 18.4 per cent and 2.1 per cent respectively.
Jetstar was the worst-performing carrier with 34.6 per cent of flights delayed and 7.3 per cent cancelled.
The entry of low-cost carrier Bonza to the market in late January added 27 routes across Queensland, New South Wales and Victoria, further lowering prices.
"The new budget airline will provide travellers on the east coast of Australia with new and direct connections, as well as competition on certain routes," Ms Brakey said.
The ACCC's report is the 11th it has produced after former treasurer Josh Frydenberg directed the body to monitor prices, costs and profits in domestic air passenger services in June 2020.
It will deliver its final report into the market by the end of June.
