Australian Domestic Economy Airfares Drop 12% Amid Cheaper Jet Fuel, Increased Capacity

Airfares in Australia have increased at a significantly slower rate compared to general inflation and the rising costs of everyday consumer goods over the past five years, with domestic economy fares rising by only 8 percent and international business class fares by 7 percent since 2019. Recent data from FCM Consulting shows domestic economy airfares were 12 percent cheaper in early 2025 compared to the previous year, translating to an average savings of $29 per ticket. This decline in airfare prices is largely attributed to reduced jet fuel costs, which remain the largest operating expense for airlines, and an increase in global seat capacity, both contributing to downward pressure on ticket prices. Despite these consumer benefits, the Australian Competition and Consumer Commission (ACCC) notes that limited competition among major airlines like Qantas and Virgin Australia has allowed these carriers to significantly boost their profit margins, with Qantas Group reporting $1.5 billion in pre-tax earnings in the latter half of 2024. The "golden triangle" route between Melbourne, Sydney, and Brisbane has seen relatively stable prices due to higher demand and fewer available seats, but overall market dynamics and increased seat availability have moderated prices since the post-COVID surge. FCM Consulting director Felicity Burke highlighted that Australia and the broader Asia-Pacific region have experienced sharper fare reductions compared to other parts of the world, a trend expected to continue as jet fuel prices remain low and airline capacity expands.