Domestic airline industry approaches full recovery, but jet fuel prices hit record high

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.

Airports suffered during 2020-21 pandemic but most still made a profit

Australia’s four largest airports (Sydney, Melbourne, Brisbane and Perth) had a combined operating profit in 2020-21 that was only about five per cent of what it was in the last full financial year before the pandemic, the ACCC’s latest Airport Monitoring Report reveals.

The report also shows that the number of domestic and international passengers using the four airports in 2020-21 was between about 17 per cent and 40 per cent of their average pre-pandemic levels.

Airport monitoring report 2020-21

This report presents the results of the ACCC's price, financial reporting and quality of service monitoring for aeronautical, car parking and landside access services at major airports for the 2020-21 financial year.

Sydney Aviation Alliance's proposed acquisition of Sydney Airport not opposed

The ACCC will not oppose Sydney Aviation Alliance’s proposed acquisition of Sydney Airport (ASX: SYD).

Sydney Aviation Alliance is a consortium of investment funds which each have investments in a range of infrastructure assets, including shareholdings in other Australian airports.

“Throughout our investigation, we heard that there is very little, if any, competition between Australian airports,” ACCC Chair Rod Sims said.

Airline competition in Australia - December 2021 report

Sixth report on the ACCC’s monitoring of Australian domestic air passenger transport services.

Privatise for efficiency, or not at all

Privatising assets without allowing for competition or regulation creates private monopolies that raise prices, reduce efficiency and harm the economy, ACCC Chair Rod Sims said in a speech on Thursday.

Speaking at the 2021 ACCC/AER Regulatory Conference, Mr Sims discussed the need to either avoid monopolies, or if not then regulate them, to prevent costs to the economy arising from unfettered use of their market power.

Mr Sims put forward two possible solutions to avoid privatisations creating future unfettered private monopolies.