Qantas blames Coldplay for airfare surge
Qantas has blamed Coldplay's sell-out Australian tour for a surge in airfares, after new data revealed that prices on some routes doubled after Rex Airlines went into administration in July.
The Australian Competition and Consumer Commission released their latest report on domestic airline competition on Tuesday, and found the demise of Rex on capital city routes had an almost instant effect on airfares.
“The recent spike in airfares corresponds with a less competitive domestic airline sector after Rex’s exit from 11 of the 23 services between metropolitan cities,” ACCC commissioner Anna Brakey said.
“While we also typically see a seasonal peak in air travel in September due to major sporting events and school holidays, there were additional pricing pressures this year.
"Passengers were no longer able to access the lower fares that Rex offered, and airline seating capacity decreased following Rex’s exit. This in turn has contributed to higher airfares.”
One of the largest price increases was on flights from Adelaide to Melbourne, which went up 95 per cent to $296 one-way for discounted economy fares between July and September.
Prices on the Melbourne to Gold Coast route increased by 70 per cent to $432 and Canberra to Melbourne by 54 percent to $298.
The ACCC report added that prices of domestic flights might not come down until a new third airline comes in to challenge the duopoly that is Qantas and Virgin Australia.
Qantas, which also owns Jetstar, and Virgin carried 98 per cent of domestic passengers, according to the ACCC.
“The exit of Rex as a third competing airline group on services between metropolitan cities may have significant longer-term impacts on the domestic aviation sector,” Brakey said.
However, Qantas Domestic chief executive Markus Svensson criticised the report, saying it only showed "a snapshot of the lowest fares available to purchase on a particular day", without taking into account events, like the Coldplay concert, "which may impact demand and fares."
The airline said the day chosen for the latest report was October 31, when Coldplay had their show in Melbourne.
“As such, demand was significantly higher on flights into Melbourne, which means lower fares were snapped up early and the fares left available to purchase three weeks out were higher than usual. The average fare increase on these routes between July and October was significantly lower,” Qantas said.
The claimed that their airfares from July to September had increased in line with inflation from the same period in 2023.
While domestic airfares are going up, international flights are coming down, with data from Flight Centre showing the cost of an international economy airfare falling by 5 to 10 per cent from the July to September period last year to the same time this year.
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