Fuel price hikes put airline industry’s recovery at risk: ACCC

Domestic airline passenger numbers in April were the highest since the COVID pandemic began in 2020, the national competition regulator said last week.

However, a surge in jet fuel prices meant airfares will likely increase in the coming months the Australian Competition and Consumer Commission (ACCC) said.

The agency’s quarterly Airline Competition in Australia report shows 4.5 million passengers flew on Australia’s domestic airlines in April, which is 89 percent 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.

New ‘ultra-low-cost’ carrier Bonza is due to launch operations in the second half of 2022 flying 27 routes, most 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.

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.