The Qantas Airways Limited (ASX: QAN) share price is trading in the red on Wednesday despite surging domestic airfares.
The cheapest Australian domestic airfares were 56% more expensive in August than they were four months prior, the Australian Competition & Consumer Commission's (ACCC) latest quarterly report on the aviation industry found.
The findings haven't outwardly impacted the Qantas share price today. The stock is currently swapping hands for $5, 1.77% lower than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) has fallen 1.45% at the time of writing, while the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has slipped 0.74%.
Let's take a closer look at the competition watchdog's latest findings on the airline industry.
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Qantas share price slumps amid ACCC findings
The Qantas share price is falling alongside the broader market on Wednesday despite demand for domestic airfares taking off in recent months.
ACCC chair Gina Cass-Gottlieb commented on the findings:
After about 18 months of historically low airfares, the cost of domestic flying has risen sharply in response to strong demand, temporary capacity reductions, and very high jet fuel prices.
The ACCC found August's cheapest economy tickets were 56% more expensive than the 11-year low reached in April. That marks a near two-year high. The cost of business airfares also lifted 17% between June and August.
Higher demand and reduced capacity also resulted in fuller flights, with 82% of seats filled in July.
But it's not all good news. The watchdog said rising demand brought about extra challenges for the industry as it continues to rebuild its workforce and battle high rates of illness.
Travellers faced record delays while the number of flights cancelled surged to three times the long-term average in July.
The ACCC noted, however, that airlines said on-time performance had improved lately amid falling illness rates, increased recruiting, and fewer scheduled flights.
The report also outlines challenges facing Qantas' budget leg, Jetstar.
Jetstar carried 23% of all domestic passengers in July, down from 28% in April. Qantas won some of its budget business' lost market share to carry 39% of passengers.
Meanwhile, the market share of competitors Virgin and Regional Express Holdings Ltd (ASX: REX) lifted to 33% and 5%, respectively.
While the Qantas share price is suffering alongside the ASX 200 today, Rex shares are in the green. It's gaining 0.7% to trade at $1.39 at the time of writing.
The far smaller airline's punctuality and low cancellation rate were noted by the ACCC today.
