Domestic business airfares are getting more expensive

Peter Terlato 17 June 2016

departures airport

But the cheapest airfares have decreased in price over the last 12 months.

New research has revealed that in the past year the price of business class airfares across Australia has increased, while restricted economy fares remain stable and best discount fares dropped slightly.

The latest aviation reports on domestic airfare indexes from the Bureau of Infrastructure, Transport and Regional Economics (BITRE) reveals the lowest available business fare has increased 5 points over the past 12 months, from 90.8 in June 2015 to 95.8 in June 2016.

The price index for business fares are based on those of Qantas and Virgin Australia.

Restricted economy airfares – Qantas (Flex), Virgin Australia (Flexi), Jetstar (Starter with Max) and REX (Rex Biz) – stayed relatively flat over the past year, from 70.9 in June 2015 to a peak of 80.9 in January 2016 and back down to 79.7 in June 2016.

Best discount domestic fares, the cheapest fare excluding baggage surcharges, declined minimally in price over the last 12 months, from 61.4 in June 2015 to 59 in June 2016. However, there was a surge in September 2015 to a high of 67.1.

Best discount fares were sourced from Qantas (Red e-Deal or Super Saver), Virgin Australia (Saver), Jetstar (Starter), Tigerair (Internet Discounted Fare) and REX (Rex Saver or Rex Net).

From the middle of February 2015, Qantas Airways ceased offering full economy fares for domestic travel. Therefore, it was no longer possible to generate an index for this fare category.

BITRE's indexes are constructed from monthly surveys of airline internet booking sites. The series is a price index of the lowest available fare in each class, weighted over selected routes.

Below is the domestic fares price index for the last 12 months.

Analysing the data for the last five years, there have been sharp declines in the price of business class fares in the months surrounding the end of the financial year (June) and Christmas/New Years (December). During these same periods, the price index for best discount airfares witnessed a spike in cost.

If domestic travel isn't your cup of tea, find out the most popular international airlines for Aussies travelling abroad.

Picture: Shutterstock

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