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Title page 1

Contents 3

Acknowledgement of Country 2

Glossary 4

Key results 6

Key industry insights and developments 7

Executive summary 8

1. Introduction 10

1.1. Government direction to monitor domestic airline services 10

2. Industry developments 11

2.1. US-based air operator Air T to buy Rex 11

2.2. Growing seat capacity supports peak demand but load factors remain high 12

2.3. Leisure travel continues to drive demand for international flying 13

2.4. Government progresses initiatives from the Aviation White Paper 15

2.4.1. Proposed aviation consumer protections framework 15

2.4.2. Reforms to the Sydney Airport Demand Management Scheme come into effect 16

2.4.3. Treasurer announces Productivity Commission inquiry into the determinants of regional airfares 17

2.5. Treasury publishes a paper on the impact of airfares on passenger demand 17

3. Industry activity and service reliability 18

3.1. Passenger demand boosted by sporting events and school holidays 18

3.2. Volatile weather impacts on domestic airline service reliability 21

4. Competition and connectivity 23

4.1. New routes added to the domestic network over the past year 23

4.2. Domestic aviation remains dominated by Qantas Group and Virgin Australia 24

5. Airfares and jet fuel prices 26

5.1. October airfares were the highest of any month since December 2022 26

5.2. Jet fuel prices have generally trended downwards since 2022 29

6. Qantas Group and Virgin Australia report strong 2024-25 financial results 30

6.1. The Qantas Group's 2024-25 financial results 30

6.1.1. The Qantas Group reports record net passenger revenue in 2024-25 31

6.1.2. Growth in Jetstar Group and Qantas Loyalty drive 2024-25 growth 31

6.2. Virgin Australia's 2024-25 financial results 33

6.2.1. Airline and loyalty program segments drive increase in underlying earnings 34

6.3. The major airline groups profit from lack of competition 36

6.3.1. The Qantas Group and Virgin Australia continue to benefit from a concentrated market 36

6.3.2. The domestic airline market is highly segmented 36

6.3.3. Loyalty programs are central to the success of the major airlines 37

Tables 30

Table 1. Underlying EBIT and margins by business segment, the Qantas Group - 2024-25 30

Table 2. Underlying EBIT and margins by business segment, Virgin Australia - 2024-25 33

Figures 18

Figure 1. Monthly passenger levels and seat capacity - 2019, 2023, 2024 and 2025 18

Figure 2. Passenger levels on routes connecting larger cities - October 2019, 2024 and 2025 20

Figure 3. Airline on-time performance rates (arrivals) - October 2023 to October 2025 21

Figure 4. Airline cancellation rates - October 2023 to October 2025 22

Figure 5. Number of domestic routes operated by airlines - October 2023 to October 2025 23

Figure 6. Share of passengers serviced by airline group across all domestic routes - October 2023 to October 2025 24

Figure 7. Share of passengers on routes serviced by 1, 2, 3 and 4 airline groups - October 2023 to October 2025 25

Figure 8. Index of real average fare revenue per passenger - January to December 2019, 2024 and 2025 26

Figure 9. Index of average real fare revenue per passenger by route type: October 2019 to October 2025 27

Figure 10. BITRE real cheapest airfare index, by airfare type - October 2019 to October 2025 28

Figure 11. Real jet fuel and Brent crude oil prices ($AUD) - October 2022 to October 2025 29

Figure 12. Underlying EBIT by business segment, the Qantas Group - 2014-15, 2023-24 and 2024-25 32

Figure 13. Underlying EBIT margin, the Qantas Group - 2014-15, 2023-24 and 2024-25 33

Figure 14. Underlying EBIT by business segment, Virgin Australia - 2022-23 to 2024-25 34

Figure 15. Underlying EBIT margin, Virgin Australia - 2022-23 to 2024-25 35