Rising airfares and flights

Alan Kohler was shocked last night that discount airfares had risen 38.9% in December.

Kohler 1

Note that the 38.9% is an increase on the previous month and not on the previous year. The BITRE data presented here appears to have come via CommSec who are possessed of sound clickbait skills. So to refer to BITRE:

Indexes are constructed from BITRE’s monthly survey of airline internet booking sites. Fares are recorded only when they are available on the nominated day of travel (the last Thursday of the month). The series is a price index of the lowest available fare in each fare class, weighted over selected routes.

Occasionally, the index may record an unusual result when the nominated day of travel falls on, or adjacent to, a public holiday:

The travel date fell the day after a public holiday in April 2018 and December 2018.

To return to the above chart note the initial point which is the Christmas spike in December 2012. Keen dayologists will recognise that 6 years ago was the last time the Thursday survey date fell immediately after Boxing Day. The discount airfare index increased 53.2% that year compared to the prior month. A similar spike can also be found in March this year when the early Easter shifted Good Friday to the day after the survey date. So no, not unusual.

However, airfare trends are rising in line with airline profits and Alan Joyce’s bonus as capacity discipline has been maintained. In positive news though, Qantas has just announced increased capacity:

Qantas is ramping up its flights to Queensland with more domestic services to Cairns, the Sunshine Coast, Townsville and Mount Isa, along with new business class options for travellers jetting from Sydney and Melbourne to Far North Queensland.

On the Brisbane-Cairns route, Qantas currently provides up to four daily return flights, but from late March, 11 additional weekly return services will be added to the schedule.

That should provide a welcome boost to the recent weak trend at the airport.

Also, I hadn’t looked through the BITRE airfare data before but it includes a neat interactive feature where you can explore data by route such as BNE-CNS:

Kohler 2



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