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16 September, 2019

Aussie airports accuse airlines of squeezing capacity and arcing airfares

Adelaide, Australia - March 21, 2016: Planes from domestic air industry competitors and rivals Qantas and Virgin, coming and going from Adelaide airport.

By Christian Fleetwood

Australian airports are calling on airlines to reduce the cost of domestic airfares by increasing capacity and offering better deals for travellers.

The Australian Airports Association (AAA) has accused airlines of playing with supply and boosting prices, after new data from the Bureau of Infrastructure, Transport and Regional Economics (BITRE) revealed domestic airfares have increased more than three times the rate of inflation, as reported by the AAP.

The accusations were immediately denied by airlines, who argue that ticket prices have fallen and added that increased airport fees were to blame for an arc in airfare prices.

The AAA pointed to the fact that domestic airfares have increased by almost 19 per cent over the past three years.

Chief executive Caroline Wilkie told the AAP that passengers should not have to keep paying more.

“The airlines should stop playing games with the public and start offering more affordable airfares,” she said.

The data shows that total domestic passenger numbers have increased by 2.5 million, or more than four per cent, over the past three years, while the number of extra seats made available by the airlines increased by just 265,000, or 0.3 per cent.

“This equates to one seat for every 9.5 additional passengers in the past three years,” Wilkie said.

Furthermore, between August 2016 and August 2019, domestic airfares increased by 18.6 per cent as airlines continued to constrain seat capacity.

In the same report, however, “best discount economy” airfares were shown to be 40 per cent lower than ten years ago, while airport charges rose 25 per cent in the same period.

Airlines for Australia and New Zealand (A4ANZ) chairman Graeme Samuel told the The Sydney Morning Herald Australia has seen a decade of a significant drop in “best discount” fares.

“The best discount fares are 40 per cent lower than 10 years ago. The reason they have increased in recent times is airport charges,” he said.

Samuel added it did not make sense for airlines to open additional seats as domestic routes were typically not selling all available seats at present.

“They’re arguing airlines would increase their capacity when [utilisation] is currently at 80 per cent,” he told SMH.

Speaking to Travel Weekly, a Qantas spokesman added that despite the airline’s fuel bill having increased in the last 12 months, airfare prices have only increased moderately in that time.

“Our fuel bill increased by 27 per cent last year to $4 billion and airport charges keep going up, but there’s only been moderate increases in airfares, with Jetstar selling almost two-thirds of fares for under $100,” the spokesperson said.

Virgin Australia said it aims to deliver best value airfares but said this could be affected if fees continue to increase.

“If airport fees continue to increase, then it will make it more difficult for all Australians to access the best value airfares,” a spokesperson for the airline told Travel Weekly.

Both airlines are members of A4ANZ, an industry group that has reportedly been lobbying for better deals for airlines and retailers when dealing with domestic airports.

However, the Productivity Commission has confirmed airport charges make up a small portion of airfares and have little impact on the price of a ticket.

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Australian Airports Association Bureau of Infrastructure qantas Transport and Regional Economics virgin australia