Qantas complaints soar, as the ACCC calls on airlines to cut domestic airfares

The competition and consumer watchdog has called for airlines to cut ticket prices. (Max Pixel)

The Australian Competition and Consumer Commission has warned airlines to cut domestic airfares, as consumers continue to pay well above 2019 prices.

Domestic airfares have declined after hitting a 15-year high in December 2022, decreasing by one-third in January 2023, but people are still paying much more to fly than they were before the pandemic.

The average domestic ticket price across all fare types was 29 per cent higher in nominal terms (actual prices) in January, or 13 per cent in real terms (after being adjusted for inflation) than it was in 2019.

It comes as airlines like Qantas report bumper profits. 

The data comes from the Australian Competition and Consumer Commission's (ACCC's) latest Airline Competition in Australia report.

“While it’s positive to see airfares fall from record highs in 2022, passengers are still generally paying more to fly today than they were before the pandemic,” ACCC commissioner Anna Brakey said.

Domestic travellers are still paying more to travel than they were before the pandemic. (Supplied: ACCC )

After months of airlines cutting capacity, contributing to higher airfares, the industry made 5.9 million seats available in January 2023 — the most in more than six months.

In January, Qantas flew at 102 per cent of its pre-pandemic capacity, Virgin at 96 per cent and Jetstar at 84 per cent.

“Airfares typically come down after the Christmas travel peak due to a seasonal decrease in demand, however, some of this reduction is also explained by the airlines increasing their seat capacity," Ms Brakey said.

The ACCC report notes airlines were able to increase performance without significantly compromising on-time performance. 

However, cancelled flights and delayed arrivals were still well above the long-term average for Jetstar in particular. Virgin was also well above the long-term average for delayed arrivals.

Jetstar was the worst-performing airline in January 2023. (Supplied: ACCC )

ACCC warns airlines to cut airfares

The watchdog also noted the price of jet fuel has fallen recently after peaking in mid-2022 because of Russia's invasion of Ukraine. 

Jet fuel prices decreased to $166 per barrel in February 2023, a 35 per cent drop since a record high in June 2022, but still remain above 2019 levels, the ACCC's report noted. 

Ms Brakey said that should result in cheaper airfares.

“The price of jet fuel has been trending down, which should enable airlines to reduce airfares further in coming months,” Ms Brakey said.

The ACCC notes jet fuel prices are down and says that should result in reduced airfares. (Supplied: ACCC )

Qantas complaints soar

Qantas got a special mention in the ACCC's report, because it was the most complained-about airline. 

The ACCC received 1,740 contacts involving Qantas in 2021-22, the most of any company, and 68 per cent higher than the previous year.

The number of contacts involving Qantas was over one-third higher than the second-most reported company, according to the report.

Top complaints included issues around refunds and flight credits related to flights cancelled due to COVID-19 travel restrictions, and delayed and cancelled flights in mid-2022.

Complaints to the regulator related to Jetstar were down 33 per cent from 2020-21 to 544, and Virgin Australia fell 27 per cent to 359.

"As Australia’s largest airline [Qantas], and an airline that generally charges a premium to fly, consumers expect a better service," the ACCC report notes. 

"Qantas needs to do more to adequately invest in its systems, processes and people to dramatically improve its customer contact services and customer dispute resolution.

"The ACCC is continuing to investigate a number of issues that consumers have raised about Qantas, and whether these issues raise concerns under the ACL."

A spokesman for Qantas said the airline's operations had improved since the period referred to in the ACCC report.

"We apologised to customers and promised to fix it. And since then, thanks to hard work from people across our business, things have improved and we are getting Qantas back to its best," he said.

"We've been the most on-time of the major domestic airlines for five months in a row and our service levels across bags, cancellations and call centres are back to similar or better levels than pre-COVID.

"Occasionally things will still fall short, as they did before COVID, but we'll continue to work hard to keep improving our performance for our customers."

The ACCC also noted in its report that the arrival of Bonza as a low-cost carrier will provide Australians more choice and competition on certain routes.