ACCC: Latest domestic airline performance report — Virgin and Jetstar soar

According to the latest Australian Competition and Consumer Comisssion (ACCC) report, Virgin Australia and Jetstar had a cracker of a year in 2024. They experienced strong passenger growth continuing right through the Christmas period.

Passengers by the numbers

Compared to December 2023, Virgin Australia’s domestic passenger numbers jumped by 15.8%, while Jetstar saw an 11.2% increase. Meanwhile, Qantas could only muster a modest 3.2% bump.

“Despite some airlines increasing their seating capacity throughout the year, this was outstripped by the growth in passenger numbers, leading to fuller flights.”

Anna Brakey, ACCC Commissioner

Flights were indeed packed. In November 2024, flights between major cities were a staggering 90.4% full—the highest since at least January 2019.

Cancellations down, but delays continue

The good news? Flight cancellations improved, with just 1.8% of flights getting axed in December 2024. Virgin Australia led the charge with a mere 0.6% cancellation rate, while Qantas lagged behind with the worst airline performance at 2.7%.

“Flight cancellations have been a real concern for passengers since the pandemic, so it is pleasing to see the improved performance in recent months by some airlines. Virgin Australia, in particular, has reduced the frequency of cancellations across its network.”

Anna Brakey, ACCC Commissioner

On-time arrivals?

Not so great. Across all airlines, the on-time arrival rate in December 2024 sat at 74.7%. REX came out on top with 75.9% of flights arriving on time, while Jetstar struggled at the bottom with 73.3%.

Airfare prices ease after holiday hikes

After peaking in October and November, airfares stabilised in December 2024, dropping 3.0% compared to the previous year. Major city routes saw the biggest price dip at 4.4%, while regional and remote routes saw smaller declines.

“The reduction in airfares is likely to have primarily benefitted business travellers, as high demand for leisure travel over the Christmas period often leads to a spike in the price of ‘best discount’ tickets.”

Anna Brakey, ACCC Commissioner

A Look Back: 30 Years of Airline Competition

The report also takes a deep dive into how domestic airline competition has evolved over the past three decades. The early 2010s saw intense rivalry, with Virgin Blue rebranding as Virgin Australia to take on Qantas in the business market. Meanwhile, Jetstar and Tiger battled it out for budget travellers.

But by the mid-2010s, the competition fizzled. Virgin and Qantas called off their price war after taking financial hits, and service reliability nosedived. In 2014, the average cancellation rate only got above 2.0% for one month of the year. In 2024, it was above 2.0% for 9 out of 12 months.

“Improved competition in the domestic airline industry is essential to ensure consumers can enjoy lower airfares, better service quality and more choice.”

Anna Brakey, ACCC Commissioner

2PAXfly Takeout

The ACCC will continue to monitor the domestic airline performance, providing quarterly reports on prices, costs, and profits.

Domestic services are likely to remain at the same levels until Virgin and Qantas start receiving more aircraft to refresh and expand their domestic fleets. With aircraft delivery delays worldwide, that won’t happen anytime soon.

Rex entered voluntary administration in mid-2024, nixing a possible third competitor in full-service inter-capital city domestic carriers. Despite the government stepping in to guarantee REX’s regional flight bookings while the airline navigates its financial troubles, that won’t change the overall domestic market much.

I’d say higher prices and full capacity are likely to stick around for a while, so I wouldn’t expect airline performance to change much.