Aircraft kilometres flown

IBISWorld forecasts the number of aircraft kilometres flown by Australian domestic and regional airlines to rise by 3.5% in 2025-26, to 594.0 million kilometres. Aircraft kilometres flown are rising in 2025-26 as airlines like Qantas and Virgin take delivery of new planes and reconfigure cabins to add more seats per flight, according to company updates. With passenger demand strengthening and tourism expected to continue growing in 2026, airlines are expected to increase the number of flights, particularly on major routes and expand regional operations to support resource projects.

The expansion of low-cost airlines over the past two decades has heavily influenced aircraft kilometres flown within Australia. These airlines, including Jetstar and Tigerair, have given consumers the chance to fly more frequently. Jetstar and Tigerair have represented the low-cost businesses of Australia's largest airlines, Qantas and Virgin Australia. Yet, the pandemic collapsed demand for domestic airfares, and Virgin Australia retired the Tigerair brand in March 2020 amid the company's financial struggles and entry into voluntary administration. As restrictions have eased and demand has gradually rebuilt, Virgin Australia has re-entered the domestic market. In 2022, regional airline Rex announced it was expanding into the market for intercity airline travel. This announcement means that nine domestic routes are serviced by three competing airlines. This, along with Bonza's entry in early 2023, temporarily increased competition and supported lower airfares. However, with Bonza entering liquidation and Rex scaling back to regional routes under Commonwealth support by September 2025, most main city routes have returned to a duopoly controlled by Qantas Group and Virgin Australia, reducing competitive pressure on fares and service standards.

Prior to the pandemic, Qantas and Virgin focused on optimising seat capacity, meaning less profitable flights were cut from schedules. This practice, also known as route optimisation, resulted in the number of aircraft kilometres flown creeping downwards in 2017-18 and 2018-19. This result came despite solid demand growth for domestic tourism, with a weak Australian dollar discouraging international travel. Route optimisation constrained supply and heightened the price of airfares, which resulted in many Australians using cars as their mode of transport instead of flying in a plane. As travel restrictions eased in 2022, labour shortages and the inflated price of jet fuel have constrained Qantas and Virgin's capacity to service rising demand, which has led to an uptick in cancellations and delays. This trend slowed an otherwise strong recovery in 2021-22 and 2022-23 from coming back to pre-pandemic levels.

Australian airlines like Qantas and Virgin had begun streamlining their route networks (optimising seat capacity, meaning less profitable flights were cut from schedules) even before the onset of COVID-19. In the post-pandemic period, this focus on route optimisation and disciplined capacity management has become even more pronounced. According to recent data from BITRE and the ACCC, both domestic and international flight frequencies and passenger volumes only returned to or surpassed pre-pandemic levels in 2025. In the intervening years, carriers have prioritised profitable routes and gradual network expansion, balancing demand recovery with operational sustainability. This strategic approach highlights a broader trend towards measured growth and margin protection across airlines. Overall, domestic and regional aircraft-kilometres are set to increase sharply from 2021 to 2026, with a projected compound annual growth rate of 16.2% through 2025–26. This rebound reflects the low point during pandemic restrictions in 2021 but also the ongoing growth in passenger demand, tourism and new fleet deliveries. All driving an upward trend.