Nov 24, 2017 Last Updated 3:11 PM, Nov 24, 2017

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Domestic airfares hit five-year high

plane waiting at airportAusBNAusBN - Domestic airfares have reached a five-year high in the first quarter of 2017, which has hit consumers but is likely to boost the revenue streams of leading Australian airlines. 

Airline prices have risen due to a reduction in the frequency of flights and the size of aircrafts, particularly to Western Australia.

Ratings agency Moody’s confirmed that industry data revealed discount economy fares, along with business and restricted economy fares were all at historical highs.

“The airlines’ strategy reflects a contraction in capital investment in the mining and resources sector, much of which is based in WA, over the past three years,” Moody’s said.

Airlines predominantly focused on domestic flights, such as Qantas and Virgin Australia are expecting to receive a revenue boost from these increased airfares.

“The growth in domestic airfares and the likely moderate growth in traffic volumes, based on our observations of the first six months of fiscal 2017, will drive an improvement in the airlines’ revenue in the second half of fiscal 2017,” added Moody’s.

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