Passenger numbers while COVID restrictions were in place, for those travelling from NSW and Victoria, have revealed that domestic airline travel practically came to a standstill in July, with worse expected when the figures for August and September arrive.
The Australian Competition and Consumer Commission (ACCC) has released it latest Airline Competition in Australia report, and the results paint a picture of the full blow delivered to the local airline industry.
It shows that passenger numbers in July plunged to 23 per cent of pre-pandemic levels, after recovering to a peak of 68 per cent of pre-pandemic levels in April.
Qantas, Jetstar, Virgin and Rex combined were forced to cancel one in three flights in July 2021, which is the highest cancellation rate since April 2020.
Weekly passenger numbers in Victoria fell 91 per cent from mid-May to early June, and in NSW they dropped 97 per cent between mid-June and the end of July.
ACCC chair Rod Sims said that the Delta outbreak of the coronavirus had managed to undo the airline recovery situation in Australia in an instant.
“The Delta outbreak has hit the domestic airline industry hard, and it has unfortunately halted the airlines’ recovery just as they were starting to approach pre-pandemic levels of flying,” Mr Sims said.
The report reveals that routes in and out of Sydney Airport were not in the top 10 busiest routes in July 2021, despite it normally being Australia’s busiest airport.
Intra-state Queensland routes were the busiest, with Brisbane to Cairns, Townsville and Mackay among the most popular.
“With many state borders closed, those that could fly were doing so closer to home,” Mr Sims said. “July was the first time that Sydney hasn’t been among the 10 busiest routes in the country, which is a sign of the state of the industry.”
Despite the reduced number of flights, the industry remains optimistic that demand for domestic travel, especially to leisure destinations, will bounce back strongly when vaccination targets are reached, and border restrictions are eased.
The ACCC has recently heard concerns from some airlines that airports may seek to significantly increase charges to airlines in order to recover lost profits from the pandemic.
The report explains that the ACCC believes such actions would be inconsistent with the Australian government’s Aeronautical Pricing Principles and would be a clear example of airports systematically taking advantage of their market power.
“We would be very concerned if the major Australian airports sought to use their monopoly position to charge airlines excessive prices in order to recover any lost profits from the pandemic,” Mr Sims said. “This could limit an already vulnerable sector’s ability to recover, and impact both consumers and the economy.”
The report also looks at the provision of air passenger services in regional Australia, with concerns about higher prices as airlines attempt to recover their operating costs from a smaller number of passengers.
“Passengers on regional routes are less likely to experience the benefits of competition between multiple airlines, and regional communities can face higher airfares than those travelling on busier routes,” Mr Sims said.
When was the last time you took a domestic flight within Australia? Where did you do? Why not share your thoughts in the comments section below?
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