Sky's the limit: Higher airfares and lower fuel prices have supported rising profitability

Operators in the Domestic Airlines industry have benefited from favourable trading conditions over the past five years. Intense price competition between Qantas and Virgin Australia, the industry's two largest players, has waned over the period. The more subdued competitive environment has allowed the two companies to seek route optimisation and streamline backend processes over the past five years in an attempt to improve profitability. Domestic tourist visitor nights have grown steadily over the period from both tourists and corporate travellers, indicating industry demand growth. Airfares have risen over the past five years due to stable supply, boosting industry more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24
Market Share of Companies

Industry Threats & Opportunities

  • Qantas and Virgin hold a duopoly in the domestic market and therefore strongly affect the industry
  • Declining price-based competition between Qantas and Virgin has supported higher profit margins
  • Airlines will introduce new fuel-efficient planes and provide extra perks to consumers
  • Industry Report - Industry Analysis Chapter

    At the beginning of the past five-year period, restructuring and price wars between the Domestic Airlines industry’s major operators Qantas and Virgin Australia constrained the industry’s performance and profitability. However, increased route efficiencies, which have led to higher airfares, and defined business strategies have assisted both major players over the past four years. In addition, the Australian dollar’s depreciation over the period has reduced local demand for international travel in favour of domestic travel, while also attracting international visitors. However, a contraction in demand from mining and resources firms has constrained the industry’s expansion over the past five years. Industry revenue is expected to increase at an annualised 2.3% o...purchase to read more.

    Additional Insights for the Domestic Airlines Industry

    IBISWorld has determined the most important Key Success Factors for the Domestic Airlines are:

  • Having links with suppliers
  • Optimum capacity utilisation
  • Ability to alter goods and services produced in favour of market conditions
  • IBISWorld analysts also discuss how external factors such as Domestic tourist visitor nights and Real household discretionary income in the Domestic Airlines industry impact industry performance..

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    What's in this report

    What is the Domestic Airlines Industry?

    Domestic airlines primarily operate aircraft on scheduled routes within Australia to transport both passengers and freight.

    Industry Products
  • Full-fare and business passenger transport
  • Low-fare passenger transport
  • Freight transport
  • Other services
  • Industry Activities
  • Scheduled domestic passenger air transportation
  • Scheduled domestic freight air transportation
  • Air transport terminal operation (except airports)
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Domestic tourist visitor nights
  • Real household discretionary income
  • Aircraft kilometres flown
  • International travel to Australia
  • World price of crude oil
  • Consumer sentiment index

  • Current Performance
  • Rising airfares
  • Popular routes
  • Profit and fuel
  • Chart: Revenue Growth

  • Industry Outlook
  • Profit
  • Competition
  • Opportunities
  • Table: Domestic Airlines Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Domestic Airlines Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Mining
  • Rail, Air and Sea Freight Forwarding
  • Finance
  • Tourism
  • Postal and Courier Services

  • Key Selling Industries
  • Aircraft Manufacturing and Repair Services
  • Airport Operations
  • Catering Services
  • Non-Scheduled Air Transport
  • Petroleum Product Wholesaling

  • Products & Services
  • Full-fare and business passenger transport
  • Low-fare passenger transport
  • Other services
  • Freight transport
  • Chart: Domestic Airlines Industry Products and Services Segmentation

  • Demand Determinants
  • Leisure travellers
  • Business travellers
  • Freight

  • Major Markets
  • Domestic leisure travellers
  • Domestic business travellers
  • International travellers
  • Logistics companies
  • Chart: Major Market Segmentation for the Domestic Airlines Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Domestic Airlines

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Domestic Airlines Industry

  • Industry Globalization
    Qantas Airways Limited, Virgin Australia Holdings Limited,
  • Table: Qantas Airways Limited - financial performance
  • Table: Virgin Australia Holdings Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Domestic Airlines Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Domestic Airlines Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Airside Services
  • Services and facilities that are provided to aircraft by an airport or other entities. These include access to facilities like runways or providing services like firefighting and telecommunications.
  • Available Seat Kilometres
  • A measure of airline passenger capacity obtained by multiplying the number of seats available on each flight by the flight's distance.
  • International Air Transport Association (Iata)
  • An organisation that assists global airlines with cost savings, technology implementation and regulatory pressures.
  • Load Factor
  • An indicator of how efficiently an airline is using its available capacity, by dividing revenue passenger kilometres by available seat kilometres.
  • What Our Customers Say

    Why buy this report?

    The Domestic Airlines market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Domestic Airlines:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Domestic Airlines market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Domestic Airlines, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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