Reason for Aussie airline's mega profits
Dwindling competition and record profits are clearing the way for an airline duopoly between Qantas and Virgin Australia, a new report has revealed.
The Australian Competition and Consumer Commission's (ACCC) latest domestic airline competition report notes Qantas and Virgin are ruling the skies off the back of strong financial results.
Qantas recorded a whopping $1.5b in earnings for the first half of the 2025 financial year – $916m of that from its domestic operations, including its budget carrier Jetstar.
Both carriers services 63.9 per cent of all passengers, the consumer watchdog found. The consumer watchdog revealed Australian's aviation industry is dominated by two major players - Qantas and Virgin. NewsWire / Luis Enrique Ascui Credit: News Corp Australia
It comes as Jetstar remains the only low-cost carrier in Australia since the collapse of Bonza and the closure of Tiger Air in 2020.
Rex, which has reduced capacity on regional services following its administration, only carried 1.7 per cent of passengers.
The airline reported a massive earnings surge of about 54 per cent between the first half of the 2024 and 2025 financial years.
'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,' ACCC Commissioner Anna 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.' Qantas' low cost carrier Jetstar has recorded a massive earnings surge of about 54 per cent between the first half of the 2024 and 2025 financial years. NewsWire / Luis Enrique Ascui Credit: News Corp Australia
Virgin Australia recorded a similar spike in earnings, achieving record profits across the first half of this financial year following its post-administration restructure under Bain Capital.
Its half-year results are not publicly reported.
Airfare prices remained the same and followed seasonal trends in the first quarter of 2025.
Passenger demand took a hit off the back of ex-Tropical Cyclone Alfred, but took back off again during April due to the school holidays, Easter and Anzac Day all following right after each other.
The ACCC found April 17, 2025, the Thursday before Good Friday, was the busiest day for domestic travel in the past five years. Virgin Australia saw a similar spike in earnings, achieving record profits across the first half of this financial year. NewsWire / Gaye Gerard Credit: News Corp Australia
Qantas delivered its first dividend since 2019 earlier in the year, announcing it had paid 27,000 non-executive employees $1000 each as a 'thank you payment' in December.
'Our financial strength means we are now in a position to pay our shareholders dividends for the first time in almost six years,' Qantas Group CEO Vanessa Hudson said at the time.
However, the airline could be forced to pay more than $120m in penalties for illegally outsourcing more than 1800 ground workers during 2020.
A three-day hearing in the High Court began on Monday to decide the penalty Qantas must pay for the illegal sacking – a decision the airline has admitted it was 'in the wrong' for.
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