👉 Background: There’s no doubt about it, Australians are very keen travellers. In fact, more than 4.7 million passengers boarded a plane in October this year.

👉 What happened: Now, the ACCC (the competition watchdog) has revealed that airfares haven't been this expensive in over 15 years so the ACCC is trying to come to the rescue.

👉 What else: The ACCC has said “we would be concerned if airlines withheld capacity just to keep airfares high”. But these sky high prices are also why Qantas, Virgin and Rex all predict a return to profits after three years of losses. It's also why some believe there may be some price gouging going on here.

What's the key learning?

💡Price gouging is when a seller increases the prices of goods or services to a level much higher than what is considered reasonable or fair. Often businesses do this to capitalise on a rapid increase in demand.

💡The aviation industry has been hit hard over the past few years with Covid, fuel price hikes and staff shortages, but the average revenue per passenger was 27 per cent higher in October 2022 than in October 2019.

💡So the ACCC is keeping a close watch on airfares so that airlines don't artificially withhold capacity to maintain high prices. Interestingly though, price gouging isn't actually illegal - but it is illegal for businesses to make false claims about why they're hiking prices.

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