Airfare increase the highest in a decade and flights fuller than ever, ACCC report warns

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The cost of an an airfare has increased by more than half since April, the country's consumer watchdog has warned.

The upward trend is set to continue for at least the next two months, according to the Australian Competition and Consumer Commission's (ACCC) latest report into domestic air travel.

It painted a dire snapshot of the aviation industry, which has struggled to meet pent-up demand for domestic travel due to ongoing workforce shortages and soaring jet fuel prices.

Domestic discount fares in August 2022 hit their highest point since 2020 and increased by 56 per cent in the past four months.

"[Before] this increase, you would have to go back … beyond a decade to see an increase of this level," ACCC chair Gina Cass-Gottlieb said.

Passengers will not see relief from the skyrocketing prices until at least October, the report warned.

"We are hoping it does not go much higher, for the reason that there is some moderation in global oil prices" Ms Cass-Gottlieb said.

From April 2022, the cheapest fares for both Qantas and Virgin doubled on Adelaide to Alice Springs flights to $870 one-way. 

Flights between Adelaide and the Gold Coast, and Adelaide and Darwin, also increased significantly, along with travel to the Gold Coast from Cairns, Newcastle and Melbourne.

The cheapest one-way ticket from Newcastle to Melbourne increased to $359 in August, up from $99 in April. 

Ongoing workforce shortages reduced the number of flights airlines were willing to offer, the report warned, which pushed up prices and contributed to significant delays.

More than 19,000 flights failed to leave on time in July 2022 alone, according to the report.

"And you have a figure where one in 15 flights on average are being cancelled … on some routes it's higher than that," Ms Cass-Gottlieb said.

Cancellations coupled with flights that are fuller than ever resulted in ongoing frustrations for customers, the report warned.

"When a flight is cancelled, it is much harder for a passenger to be placed on a replacement flight straight after or soon after," Ms Cass-Gottlieb said.

"It's not just many hours but days before they're given a replacement flight.

"We have people who have to either extend accommodation, pay higher priced accommodation than they would when they did not intend, and also reports of people sleeping on the floor of the airport.

"It has multiple consequences that are not only disappointing [and] have financial impacts, but can be – depending on how important a particular event is – emotionally distressing."

The rising cost did not sit well for passengers in Queensland's central west, where discount incentives by airlines are barely a drop in the ocean.

Blackall-Tambo Mayor Andrew Martin said Qantas's recent $50 flight voucher incentive did not cut it for outback residents.

"If you've got $200 flights, $50 is significant," he said.

"But when you've got $600 flights … $50 won't even buy you a carton of beer in some of the towns out here.

"It's a token and [doesn't] mean a lot to remote Queensland."

The state government spent $10 million subsidising flights to remote Queensland towns including Roma, Charleville, Longreach, and Julia Creek in 2021-22, where demand was often too low for the route to be commercially viable for the operator.

But return flights to Brisbane could still be expensive, especially for those needing to travel at short notice.

Mr Martin said when a person living in the bush booked a flight within 24 hours of take-off, it was usually an emergency.

"It's price gouging really," he said.

The ACCC also said it was aware of complaints made against Qantas in recent months.

The national carrier's flight credit scheme was under the microscope, with customers complaining they ended up paying higher prices for flight bookings compared to those made with other payment options.

"The ACCC continues to investigate whether Qantas' conduct may raise concerns under Australian consumer law," the report said.

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