Qantas jets at Sydney Airport.
International capacity from Australia has surpassed 7.1 million departure seats in the first quarter (Q1) of 2025, reflecting a 6.1% year-on-year increase and exceeding pre-pandemic levels by 2.5%.
According to OAG Schedules Analyser data, Singapore has been one of the strongest performers, with capacity rising nearly 9% to more than 1 million departure seats compared to the same period in 2024. Capacity to mainland China has also grown by almost 10%, supported by China Southern Airlines’ resumption of seasonal Guangzhou-Perth flights. Meanwhile, the United Arab Emirates has recorded a 15.6% increase, driven by Emirates reinstating service to Adelaide and expanding capacity to Brisbane and Perth.
While international travel demand remains strong, Australia’s domestic aviation sector is experiencing capacity constraints and rising airfares. OAG data shows there were 18.8 million domestic departure seats in Q1 2025, a 3.6% decline year-on-year and 2.7% lower than 2019 levels.
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In February, the Australian Competition & Consumer Commission (ACCC) released its latest domestic airline competition report, highlighting a shift in market dynamics following the collapse of Bonza in April 2024 and Rex’s exit from major city routes in July 2024. The exit of these carriers has reduced connectivity, particularly to regional Australia, and increased reliance on the Qantas Group and Virgin Australia.
Virgin Australia and Jetstar have benefited from Rex’s exit, adding capacity on some key routes, including Adelaide-Melbourne. However, the overall reduction in competition has contributed to higher airfares, particularly on major city routes, where average real fare revenue per passenger rose 13.6% between July and December 2024—higher than the 10.7% increase over the same period in 2023.
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