By early 2025, Australian flyers found themselves enjoying a rare reprieve: cheaper airfares across the country’s busiest domestic routes. Economy tickets, once bruised by post-lockdown surges, have been gently descending. On average, passengers paid 12% less for a domestic economy seat in January and February compared to the same period last year. For a country where the cost of flying has often tested household budgets, this is not just change—it’s change you can count.
The airways between Sydney, Melbourne, and Brisbane—Australia’s golden triangle—have been central to this shift. Travellers on the Sydney–Melbourne corridor, often dubbed one of the busiest in the world, were greeted by stabilised fares, with full-service carriers pricing in the mid-$200s and Jetstar routinely offering options below $150. While premium tickets still flirted with the $300 mark—especially during marquee events like the Australian Open—the overall trend was unmistakably downward.
Brisbane–Sydney and Melbourne–Brisbane offered a similar, if subtler, easing. On most days, Qantas and Virgin one-way tickets hovered in the mid-$200s. Low-cost alternatives chipped away further, with some Jetstar flights slipping into the $120–$180 range. Even when demand was steady, planes were running at high capacity, leaving little slack in the system. Yet competition and a growing pile of available seats helped nudge prices lower, even if by a modest margin.
The most noticeable drops came on leisure routes. Melbourne to Gold Coast, long a favourite for holiday-goers, saw sharper fare corrections. The post-holiday lull in late January and February gave airlines cause to fill seats aggressively. Qantas fares for that route fell to around $250, Virgin undercut them to around $200–$250, and Jetstar went even lower, dangling fares under $150. Compared to early 2024, when Queensland beach escapes were all the rage, this year’s pricing felt like a breath of sea breeze rather than a cyclone.
Transcontinental routes—Perth to Melbourne or Sydney—told a similar story. Traditionally among the priciest in the country, these long-haul domestic trips now demand slightly less of passengers’ wallets. Tickets that once cleared $400 dropped by 5–10%, often sitting between $300 and $350 on Qantas and Virgin. Jetstar again provided the price floor, sometimes offering advance-booked seats under $250. The fall in fares reflects growing flight frequency to and from Perth and the stabilisation of the competitive field after Rex exited these routes and Bonza grounded operations.
So why the drop? The answer isn’t a single cause but a convergence. Most obviously, fuel prices have dipped. Jet fuel now costs about 17% less than its 2024 average, and since fuel is the largest operational cost for airlines, this directly improves their pricing flexibility. Airlines no longer need to pass on such steep operating costs to consumers, so ticket prices fall—at least when competition allows it.
Capacity is the second lever. By the end of 2024, most carriers had returned to or exceeded their pre-pandemic seat counts on key routes. Melbourne Airport, for instance, was operating at 97% of its 2019 domestic capacity. More planes in the sky equals more seats to fill, and airlines are having to price smartly to do so. Virgin in particular has leaned into this, aggressively growing its share of the domestic market to 35% by the end of 2024, partly through sharper pricing.
Even so, the market is less crowded than a year ago. While new entrants like Bonza and Rex stirred the pot briefly in 2023, both have scaled back or exited key routes. That leaves Qantas and Virgin holding most of the cards. Despite this duopoly, they’ve held back from the kind of fare inflation seen during the post-lockdown travel surge. Jetstar’s budget offerings continue to exert downward pressure, acting as an escape valve for price-sensitive consumers.
The demand side has softened too. January and February 2024 were extraordinary months, with demand spiked by events like Taylor Swift’s stadium tours. No such pull factors inflated early 2025. Add to that a late Easter this year and households under pressure from higher mortgage rates and everyday expenses, and you have a public less willing to pay top dollar for discretionary travel. That in turn has forced airlines to calibrate their pricing to more cautious consumers.
The upshot? Lower fares. According to travel consultants FCM, this was always expected once fuel prices came off and capacity returned. They’ve now called it a reality. The Australian Competition and Consumer Commission has also tracked the trend, noting that by December 2024, average revenue per passenger was already slipping, with the biggest falls seen on major capital city routes.
Still, no one is popping champagne at 30,000 feet just yet. The domestic aviation market remains tightly held, and pricing will always be a balancing act between market share and margin. If global oil prices lurch upwards again, or another burst of demand kicks in, this gentle decline in fares could reverse. For now, though, with oil subdued and no major events distorting demand, the price of flying remains pleasantly grounded.
This rare moment of affordability won’t last forever, but while it does, Australian travellers are free to roam more freely—whether it’s a family escape to the Gold Coast or a quick business hop between capital cities. It’s a reminder that sometimes, competition and capacity win out, even in an industry with a tight grip on pricing.
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✈️Aussie domestic airfares drop 12% in early 2025 vs 2024. 🛩️ Sydney-Melbourne-Brisbane routes see fares as low as $150. ⛽ Fuel costs down 17% & increased capacity drive savings. 🏖️ Leisure routes like Melbourne-Gold Coast see biggest dips. #TheIndianSunhttps://t.co/b0qq5yUcYE
— The Indian Sun (@The_Indian_Sun) May 28, 2025
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