Qantas / Jetstar takes advantage of Australian travelers

Australia’s sole budget carrier has once again cashed in on the lack of competition in the nation’s aviation sector. Within the Qantas Group’s whopping $1.5 billion earnings before tax in the first half of 2024-25, Jetstar jacked up prices to record an operating margin of 18 per cent.

That is up from 13 per cent in the first half of the 2023-24 financial year, the increase coinciding with fellow budget airline Bonza’s collapse in April 2024. It helped delivered massive earnings increase for the Qantas Group, with Jetstar domestic flight revenue jumping 54 per cent in that same time frame.

The Qantas group has a reputation of dropping prices to squeeze out any competition, i.e. Bonza, and once the threat has gone, they increase their prices once again.

The findings come from the Australian Competition and Consumer Commission’s quarterly look at domestic airline competition, which found both Qantas and Jetstar had recorded staggering financial results in the back half of 2024.

Virgin has not publicly reported its half-year results, although chief executive Jayne Hrdlicka said in February it had achieved record profits due to fuller aircraft.

ACCC commissioner Anna Brakey said Jetstar’s earnings jump was largely explained by Bonza’s demise. Compared with an 18 per cent operating margin on domestic flights, Jetstar’s international flights were at 15 per cent due to the increased competition, the report said.

“The high half-yearly earnings reported by Qantas Group reflect its dominance of the domestic airline sector, with Qantas and Jetstar accounting for over 60 per cent of passengers,” Brakey said.

“Jetstar has been able to capitalise on the continued absence of competitive pressure from another low-cost carrier in the domestic market to increase its market share and operating margin.”