The ACCC's report indicates that the withdrawal of Rex and Bonza has significantly reduced competition in the domestic market, with Qantas and Virgin Australia now carrying 98% of domestic passengers.

Following the collapse of Rex Airlines, domestic airfares in Australia have surged by an average of 13.3%, particularly impacting flights between major capital cities.

Total capacity on major routes has dropped by 6% since Rex's administration, despite stable passenger numbers, indicating fuller flights.

The ACCC warns that without the emergence of a new airline, passengers may continue to face persistently high airfares and fewer choices in the domestic market.

ACCC commissioner Anna Brakey warned that Rex's exit could have long-term negative implications for the domestic aviation sector, potentially limiting consumer choices and reducing incentives for lower fares.

Rex Airlines recently appointed administrators and ceased operations, leading to the cancellation of 11 major routes and a reduction in low-cost carrier options.

The Australian Competition and Consumer Commission (ACCC) has reported significant fare increases across various domestic routes, with a staggering 95% hike from Adelaide to Melbourne, now costing $296, and a 70% rise from Melbourne to the Gold Coast, bringing the fare to $432.

In response to the ACCC report, Qantas argued that the findings do not accurately reflect actual prices paid by customers, attributing fare increases to demand factors.

The domestic airline industry has become increasingly concentrated, with barriers to entry for new airlines heightened by ongoing supply chain issues and a shortage of pilots and engineers.

Some less-traveled routes have seen even more dramatic fare increases, such as a 171% rise from Canberra to Gold Coast, now costing $490, and a 122% increase from Brisbane to Hamilton Island, now priced at $871.

Despite a 41% drop in jet fuel prices over the past year, domestic airfares have not decreased, contrasting with a 5-10% reduction in international flight prices.

Inflation-adjusted revenue per passenger has risen by 13.3% from July to September 2024, reflecting increased profitability for the remaining airlines.