Lack of competition driving growth for Australian airlines: ACCC

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Strong demand for air travel and limited domestic competition are among the factors that have steered Australia’s two largest airline groups, Qantas and Virgin Australia to finish up the first half of the 2024-25 financial year on a high note, according to a new report from the competition watchdog. The ACCC’s latest Domestic Airline Competition report found that the Qantas Group led the charge, recording earnings before interest and taxes of $1.5 billion, with $916 million derived from domestic operations across Qantas and Jetstar. Its largest contributor was Qantas Domestic, including QantasLink, with $647 million. “The high half-yearly earnings reported by Qantas Group reflect its dominance of the domestic airline sector, with Qantas and Jetstar accounting for over 60 per cent of passengers,” said ACCC Commissioner Anna Brakey. Jetstar, now Australia’s sole low-cost carrier following the collapse of Bonza in April 2024 and Tigerair’s 2020 exit, posted a 53.7% earnings increase to $269 million.

“Jetstar has been able to capitalise on the continued absence of competitive pressure from another low-cost carrier in the domestic market to increase its market share and operating margin,” Brakey said.

While Virgin Australia does not publish half-year financials, former CEO Jayne Hrdlicka announced record profits earlier this year, citing benefits from a post-administration restructure under Bain Capital. Virgin also increased its market share to 34.4% in March 2025, up from 31.3% a year earlier, bolstered by acquiring three of Rex’s Boeing 737 leases and expanding capacity. Meanwhile, despite weather disruptions from Ex-Tropical Cyclone Alfred causing a 4.9% decline in March passenger levels, travel rebounded in April. Airservices Australia noted 17 April 2025 as “the busiest day for domestic travel in the past five years.” Flight punctuality has also improved, with on-time arrivals reaching 80.2% in March—up from 74.5% in October 2024. “It is encouraging to see the on-time arrival rate improving as this means travellers can have more confidence that their flight will arrive at the time they booked,” said Brakey. On the airfares front, average airfares saw seasonal fluctuations, dropping 16.1% from October 2024 to January 2025 before rising 9.6% by March. “The trends observed in average airfares since January reflect seasonal factors and are broadly consistent with those observed in previous years,” Brakey concluded.

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