Australia’s consumer watchdog has put airlines on notice as domestic airfares soar, while Qantas expects a summer of huge demand that will test its service and reliability.
The Australian Competition and Consumer Commission (ACCC) said it will “monitor them [airlines] closely” to ensure the likes of Qantas and Virgin aren’t withholding capacity on flights to keep airfares high.
This comes as the ACCC’s latest Airline Competition in Australia report reveals the average revenue per passenger, an indication of average airfares across all fare types, was 27 per cent higher in October 2022 than it was in October 2019.
After sizeable losses due to the pandemic, airlines are forecasting positive financial returns due to strong demand and high airfares.
The Qantas Group, Virgin Australia and Rex all expect to be profitable in the current financial year ending June 2023.
The Qantas Group expects an underlying profit before tax of between $1.35 billion and $1.45 billion for the six months to the end of 2022, which is close to the company’s record for a full year of operation.
“Airfares have risen due to strong demand for travel and constrained supply as airlines have scaled back their schedules in response to high jet fuel costs and operational challenges,” ACCC Commissioner Anna Brakey said.
“We accept that the airlines are still experiencing some pandemic-related resource challenges, but the ACCC will be monitoring them closely to ensure they return capacity to the market in a timely manner to start easing pressure on airfares.”
Pressure is on the national carrier to regain some of its community standing which it has surrendered recently due to poor on-time performance, lost baggage and sub-par customer service.
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From bad to busy
The Qantas baggage handler fiasco is the latest bad look for the company after it topped this year’s list of worst products and services in the Choice Shonky Awards.
Choice said Qantas had disappointed its customers on almost every front – unusable flight credits, delayed flights, lost baggage and endless call wait times.
Earlier in the year Qantas fell out of the top five rankings for the world’s best airlines amid a massive wave of customer dissatisfaction.
In August, airline boss Alan Joyce apologised to customers and assured the public the national carrier was “working hard to get back to our best”.
The airline has since then pulled off a stunning turnaround, registering the best on-time performance of any major domestic airline in October.
The flying kangaroo also went from being the worst-performing airline in the country for cancellations to being the best.
However, Qantas-owned subsidiary Jetstar has consistently underperformed in 2023.
Qantas has said that more aircraft will be available in the coming weeks and that several new international routes will start before Christmas. Some eight million passengers are expected to travel with the airline over the Christmas period.
Cheap Bonza flights
Bonza CEO Tim Jordan recently said on Sky News that airfares on flights lasting about an hour should not be more than $50.
“We’re about the new market, so our market currently is either taking the car or staying home,” he said.
“If you want to be in Melbourne for that 11 o’clock meeting on a Tuesday, you’re probably taking another airline, that’s not us.
“But if you’re happy to be flexible in terms of the day of travel, then it’s likely that we will be able to offer a very low fare and stimulate a brand-new market to brand-new destinations.
“We’re about market growth but those fares will be incredibly low. We believe that if you’re flying about an hour you shouldn’t be paying much more than about $50.”
Chief commercial officer at Bonza Carly Povey told TND that Australian travellers could fly with Bonza starting from $50.
“Aussie travellers will be able to fly with Bonza starting from $50 for each hour they’re in the air with us.
“We are about flights for the many, not the few. We are committed to low-cost flights that will allow many more Australians to explore their own backyard and connect with loved ones more often.”
Strikes called off
Aviation firefighters called off plans to strike ahead of the Christmas season.
Firefighters were set to walk off the job at 27 airports across Australia between 6am and 10am on December 9, causing cancelled flights and long queues.
However, the United Firefighters Union of Australia on Saturday announced employer Airservices Australia had agreed to increase the number of aviation firefighters over time and prevent staff shortages in future.
– with AAP
