The cost of flying on one Canberra route has more than doubled, a new report shows, amid concerns over Australia's airline duopoly.
Prices for the best discount airfares between Canberra and the Gold Coast have risen 171 per cent to an average of $490, a report by the Australian Competition and Consumer Commission found.
The report also found Rex's voluntary administration and withdrawal from major routes had removed many low-cost options for travellers.
Passengers flying the Canberra to Melbourne route are now paying 54 per cent more for airfares, at an average of $298, since Rex's exit.
Rex entered voluntary administration in July but has continued to operate flights on regional routes.
The report on domestic airline competition landed on Tuesday, just before confirmation the federal government would hand Rex an $80 million lifeline.
The funding will support the continuation of critical services for regional communities, the government said.
Qantas, Virgin make up 98 per cent of market
The ACCC found the airline industry was now more concentrated since Rex's exit.
It said earlier this year, nearly half of all passengers flew on routes that were serviced by either three or four airline groups.
Since Rex and Bonza entered administration, there are now no domestic routes serviced by more than two major airline groups.
Qantas Group and Virgin Australia now make up 98 per cent of domestic flight bookings.
Since Rex's exit, the best discount airfares for major city routes have risen 21 per cent in the last quarter and 4.5 per cent year-on-year.
While prices typically rise in September due to seasonal demand, additional pricing pressures had contributed to the soaring costs, ACCC commissioner Anna Brakey said.
"Passengers were no longer able to access the lower fares that Rex offered, and airline seating capacity decreased following Rex's exit," she said.
"This, in turn, has contributed to higher airfares."
Cost of international flights has fallen
While major city airfares have been trending up since July, domestic fares across the board are largely unchanged compared with 12 months ago, the ACCC found.
Despite this, the cost of jet fuel, which accounts for up to a quarter of an airline's operating costs, has become cheaper.
The price of fuel fell 41 per cent in the year to September, down to the lowest prices seen since 2021.
The consumer watchdog also noted international flights fell between 5 and 10 per cent in the year to the September quarter.
Ms Brakey said the domestic airline industry had become even more concentrated and it could be some time before a new airline emerges.
"With less competition, there is less choice for consumers and less incentive for airlines to offer cheaper airfares and more reliable services," she said.
The only hint of another player in the airline space is Koala Airlines, which emerged in August saying it would use artificial intelligence to optimise its business.
