Accommodation Australia welcomes inquiry into high regional airfares

The peak body representing Australia’s accommodation sector, Accommodation Australia, has welcomed the Federal Government’s move to launch a Productivity Commission Inquiry into regional airfares—a major step toward tackling the high cost of flights that affect regional tourism, workforce access, and economic growth.

The Albanese Government today released the terms of reference for the inquiry, which will examine the key factors influencing regional flight prices, including competition, pricing practices, and profit distribution along the supply chain.

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Accommodation Australia CEO James Goodwin said the review was “an important step to help improve aviation connectivity and competitiveness in regional and remote areas and to encourage tourism dispersal across the country.”

“Regional aviation is vital to connect hard-to-reach areas and crucial for the sustainability of hotel, motel and resort operators,” Mr Goodwin said.

“Many of Australia’s greatest attractions are in regional areas, with aviation vital to support tourism. Better connections and better-value flights to regional communities would help to open areas to international markets as well as encourage more Australians to visit and explore more of their own country.

“Regional airlines also provide essential transport not only for visitors but the accommodation workforce, providing important links to larger cities for business, medical and training needs.”

Accommodation Australia represents 1,000 hotel and motel properties employing close to 120,000 people, with around 40 percent of the workforce based in regional Australia.

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A closer look at the inquiry

The Productivity Commission Inquiry into Regional Airfares was announced as part of the Federal Government’s response to the Aviation White Paper, which identified persistent inequities in regional travel costs.

According to the White Paper, the average ticket price per kilometre is 52 percent higher for flights involving regional airports than for flights between two capital cities. Despite overall growth in passenger numbers, the number of regional routes has fallen from 458 to 291 between 1989 and 2021, while remote routes have dropped from 264 to 163. Many of these are now served by only one airline.

Deputy Prime Minister and Minister for Transport Catherine King said the inquiry will help governments collect the nationally consistent data needed to make regional air travel fairer and more reliable.

“Safe, affordable and reliable air services are vital for regional and remote communities — not just for travel, but for access to healthcare, education and jobs,” she said. “More accessible regional airfares can help drive local economies, support tourism and boost productivity in regional Australia.”

The Productivity Commission will hold public hearings and invite submissions from communities and industry stakeholders. Its final report is expected in around 18 months, with findings likely to inform future policy to make Australia’s regional aviation network more competitive, reliable and affordable.