Spring 2025 Sees Airfares Surge To Record Levels As ACCC Reports Massive Spike In Australian Domestic Travel Demand, Creating A Unique Travel Experience

Published on December 9, 2025

Spring 2025 has brought a significant surge in airfares, with the Australian Competition and Consumer Commission (ACCC) reporting a massive spike in domestic travel demand. This unprecedented rise in airfare prices reflects the growing demand for local travel experiences, as Australians seek to explore their own country. The surge in bookings is driven by a combination of pent-up travel desire post-pandemic, seasonal factors, and the emergence of unique travel experiences across domestic destinations.

In September and October 2025, domestic air travel in Australia faced unprecedented demand, creating significant pressure on seating capacity and leading to higher airfares for travellers. The latest Domestic Airline Competition report from the Australian Competition and Consumer Commission (ACCC) highlights this surge, marking a notable shift in the industry’s dynamics.

During October 2025, Australian domestic airlines carried over 5.5 million passengers, which was a 3.8% increase compared to the same month in 2024. This figure made October 2025 the second busiest month since January 2019, which is when the ACCC began tracking domestic airline industry data. The spike in passenger numbers can be attributed to several factors, including seasonal travel trends and strong demand from both leisure and business travellers. As a response, Australian airlines, including major carriers, added more than 45 extra flights to their schedules in late September and early October to accommodate the growing number of passengers. These additions led to a 4.5% increase in overall seating capacity for domestic routes in October 2025, compared to the previous year.

However, despite the increase in seating capacity, the high demand for flights meant that the planes were still unusually full. In October 2025, the average seat occupancy rate reached 84.4%, which was significantly higher than the industry’s 12-month average of 81.6%. This level of demand led to higher-than-normal airfares. The average ticket price in October 2025 was the highest seen since December 2022, with a 3.2% increase compared to October 2024. This surge in airfares reflects the tight supply and the increased pressure on airlines to manage growing passenger numbers.

The report also highlighted the impact on regional aviation, with Air T’s proposed acquisition of Rex Airlines set to preserve essential regional connectivity. Rex, which entered voluntary administration in mid-2024, has now secured a future with the backing of Air T, ensuring the continuity of services to smaller regional destinations. The acquisition is expected to provide reassurance to communities that rely on Rex’s network of routes, which had been under threat following Rex’s financial troubles. The airline plans to continue operating existing regional routes and to gradually rebuild its pre-pandemic network of services.

One of the most significant operational challenges during this period was the decline in on-time performance for domestic flights. In October 2025, only 74.1% of domestic flights arrived on time, falling short of the industry average of 80.6%. The report attributes this decline in punctuality to several factors, including adverse weather conditions like crosswinds in Sydney, which caused delays and disruptions across the network. The cancellation rate for domestic flights was recorded at 2.1%, which was consistent with the long-term average of 2.2%. Despite this, the overall impact on travellers was mitigated by the industry’s ability to adapt and manage operational challenges.

The financial performance of Australia’s major airlines was also a key focus of the report, with both Qantas Group and Virgin Australia reporting strong earnings for the 2024-25 financial year. The Qantas Group, in particular, saw its profitability boosted by its loyalty program, which continued to perform well, alongside the successful growth of its budget airline subsidiary, Jetstar. Jetstar Domestic reported a 55% increase in earnings compared to the previous year, benefiting from robust demand for domestic leisure travel. As Australia’s only low-cost carrier, Jetstar has managed to capture a significant portion of the budget-conscious traveller market, further strengthening Qantas’ overall position in the market.

Virgin Australia, on the other hand, has also enjoyed healthy growth, driven by a surge in passenger demand across both domestic and international routes. The airline’s frequent flyer program, Velocity, has seen substantial growth, helping to cement Virgin Australia’s position as a leading player in the domestic aviation market. Both Qantas and Virgin Australia have now achieved three consecutive years of profitable earnings, reflecting their strong market positions and resilience in an increasingly competitive environment.

Together, the Qantas Group and Virgin Australia now account for around 98% of the domestic airline market. The market has become more segmented over the years, with the two major airline groups focusing on different customer bases. Virgin Australia made a strategic shift in 2020, focusing on mid-market customers and targeting a one-third market share. Meanwhile, the Qantas Group has implemented a dual-brand strategy, with its premium Qantas brand catering to full-service travellers and Jetstar focusing on budget-conscious passengers. This segmentation has allowed the Qantas Group to capture a dominant two-thirds share of the market.

Airfares for Spring 2025 have hit record levels, driven by a significant surge in domestic travel demand across Australia, as reported by the ACCC, fueled by post-pandemic travel recovery and growing interest in local experiences.

In summary, the Australian domestic airline market in 2025 has experienced significant changes driven by high demand, increased capacity, and rising airfares. While the major airlines have managed to sustain profitability and growth, the continued success of the sector will depend on the ability of airlines to balance passenger demand with operational challenges, such as delays, weather disruptions, and rising ticket prices. The ongoing consolidation of the market and the strategic moves made by airlines, such as the acquisition of Rex, will shape the future of Australia’s aviation landscape.