The number of passengers flying domestically in April 2022 was the highest it has been since the pandemic began, but jet fuel prices have surged to record levels and airfares are set to increase in the coming months, the ACCC’s latest Airline Competition in Australia report reveals.

The quarterly report, released today, shows 4.5 million passengers flew on Australia’s domestic airlines in April, which is 89 per cent of pre-COVID levels.

“After two very challenging years, it appears the domestic airline industry is approaching a full recovery,” ACCC Commissioner Anna Brakey said.

Flights to Queensland holiday destinations were especially popular in April. Passenger numbers on Canberra–Gold Coast reached 193 per cent of pre-COVID levels, and passengers travelling between the Gold Coast and Melbourne, Adelaide and Sydney also exceeded the pre-pandemic average

The aviation industry welcomed the return of passengers over the busy Easter period, however, on-time departures dropped to 62 per cent, their lowest point on record, due to COVID-related workforce shortages and staff absences.

“Airlines and airports enjoyed strong demand at Easter, but the combination of high passenger numbers and staff shortages created operational challenges for them,” Ms Brakey said.

The airlines are now forecasting a sustained recovery in domestic travel, but record high fuel prices are sending airfares higher and forcing airlines to revise their capacity forecasts.

Monthly jet fuel prices hit an all-time high in May. Qantas subsequently revised down its capacity forecast from 107 to 103 per cent of pre-pandemic levels for July and August.

However, Virgin, Qantas and Jetstar reported that they expect to be flying at or above pre-pandemic levels in the coming months. Qantas has also said that demand for business travel is recovering faster than expected, with small business demand above pre-pandemic levels and larger corporate traffic at 85 per cent in May.

“A sustained recovery over the coming years will improve the financial health of the domestic airline industry and help secure the additional competition we’re seeing from new and expanding airlines,” Ms Brakey said.

New ‘ultra-low-cost’ carrier Bonza is due to launch operations in the second half of 2022 flying 27 routes, the majority of which are currently unserved. The ACCC is monitoring how existing airlines react to this new competition, including by seeking information from the airlines to understand their strategic responses to Bonza.

Discount airfares briefly hit an 11-year low in late-April, following higher prices over Easter. However, airfares are expected to rise over the coming months.

“While travellers have benefitted from generally low airfares over the past year as airlines encouraged people back to the sky, historically high prices for jet fuel means we are starting to see fares rise again,” Ms Brakey said.

“We will be monitoring the airlines’ pricing behaviour and looking out for conduct that may harm competition to the detriment of consumers. This will be increasingly relevant as the industry enters a more stable period after the disruption caused by COVID-19.”

In April, almost two million passengers flew on routes serviced by all three competing airline groups: Qantas Group (including Jetstar), Virgin and Rex. This figure represented 43 per cent of all domestic passengers, compared with less than two per cent recorded back in 2019.

“We know that passengers are the winners when flying on routes where the Qantas Group, Virgin and Rex are all vying for customers,” Ms Brakey said.

While the industry is close to recovery, passengers have been slower to return to some routes and the airlines continue to review their networks accordingly. Rex withdrew from one of its intercity routes, Sydney–Canberra, in late May. It will also be exiting some regional routes in late June when the Australian Government’s Regional Airline Network Support program ends.

The reopening of the Western Australia border helped Qantas increase its market share. Qantas carried the most domestic passengers in April at 37 per cent, up from 31 per cent in January 2022. Virgin’s share fell to 31 per cent and Rex’s remained steady at 4 per cent.

Qantas and its subsidiary Jetstar together carried around two-thirds of all domestic passengers in April 2022.

Australian domestic air services – December 2019 to April 2022

Passenger numbers on domestic flights have been increasing since February 2022 and have almost returned to pre-pandemic levels

Source: BITRE; Australian domestic airline activity; data collected by the ACCC from Qantas, Jetstar, Virgin and Rex.

Real monthly jet fuel and Brent crude oil prices – January 2007 to May 2022

Jet fuel prices in inflation adjusted terms hit their highest ever level in May 2022, surpassing the previous high during the Global Financial Crisis in 2008

Source: ACCC calculations using ABS, RBA and US EIA data.

Note: US Gulf Coast Jet Fuel prices converted into current Australian dollar terms. The price an airline pays for jet fuel will also vary depending on the ports to which its aircraft operate and the respective region-specific jet fuel benchmarks.


On 19 June 2020, the ACCC was directed by the former Treasurer to monitor the prices, costs and profits of Australia’s domestic airline industry and provide quarterly reports to inform Government policy. The direction is for three years. This report is the eighth under the Treasurer’s direction.