The Federal Government has released the terms of reference for the Productivity Commission Inquiry into regional airfares.
“Regional Australians deserve reliable air services at reasonable prices and that’s what this review is about,” the Federal Government said.
The inquiry will look into all cost factors – including competition, pricing practices and whether profits along the supply chain are fair – to build a clearer picture of how operating costs affect regional connectivity.
“This review offers a timely opportunity to better understand the mechanics of regional air travel and the key cost drivers behind it,” said the Australian Airports Association CEO Simon Westaway, who added the inquiry will also look at airport charges.
“Airports have consistently demonstrated a willingness to work with both new entrants and established airlines to improve choice and connectivity for regional communities.
“[This] inquiry should consider connectivity outcomes alongside fare levels, reflecting the real needs of regional Australians.”
The airfare review is a response to the Aviation White Paper, which found the average ticket price per kilometre was 52% higher for flights involving regional airports than for flights between two capital cities.
Questions around high regional airfares arrives as Rex looks set to restore itself as a full player after being bought by Air T.
The Productivity Commission will hold public hearings and invite submissions from the public, with the aim of providing a final report in mid-2027.
