Regional Airfares Under Federal Inquiry
A Productivity Commission interim report finds short regional flights cost 173 per cent more per kilometre than major city routes.
Updated on Nov. 11, 2026 in Air Travel
Live Poll
Do you think flights from your local region have become less affordable recently?
The Productivity Commission released an interim report on 11 November 2026 finding regional airfares are 173 per cent more expensive per kilometre than major city routes. The inquiry, commissioned by Federal Treasurer Jim Chalmers, received more than 100 submissions.
Why it matters
Airlines are scrapping regional routes amid high fuel costs and weak demand, leaving many regional and remote communities with fewer and costlier options. The findings put pressure on policymakers to examine why regional travel is so expensive to operate and sell.
Airlines spend about 91 cents of every dollar earned on regional operating costs, and more than a third of seats on regional and remote routes are empty. Half of regional and remote routes operate 10 or fewer flights per week, and 72 per cent are served by a single carrier.
The players
Productivity Commission
An independent Australian Government research and advisory body that conducts inquiries into economic, social and environmental policy questions.
Jim Chalmers
Australia's Federal Treasurer, who commissioned the inquiry into regional airfares.
Qantas Group
Australia's largest airline group, which carried the majority of regional passengers in 2025 and defended regional route cuts at a Senate inquiry.
Virgin Australia
A major Australian airline that, together with Qantas, carried more than 90 per cent of regional and remote passengers in 2025.
Rex
Regional Express, a regional airline that entered administration in 2024.
The details
One family of four reportedly paid $3,200 for a one-hour flight from Kalgoorlie to Perth. The report cites fuel costs, aircraft requirements and airport fees as drivers of regional flight costs, and regional airline Rex entered administration in 2024 after losing around $1 million a week.
Timeline
2024: Rex entered administration after losing money on capital city expansion.
2025: Qantas Group or Virgin Australia carried more than 90 per cent of regional passengers.
October 2026: Qantas and Virgin defended regional route cuts at a Senate inquiry.
11 November 2026: Interim Productivity Commission report released.
April 2027: Commission to deliver its final report.
Roadmap
The interim findings continue a federal inquiry into regional airfares commissioned by Treasurer Jim Chalmers, with the final report due in April 2027. The inquiry follows the 2024 collapse of Rex, which left many regional routes served by a single carrier.
Travellers on regional routes face fewer flights and limited carrier choice, which can push fares well above city prices. Those considering regional trips should compare fares early and factor in higher costs when budgeting.
The takeaway
Regional travellers are paying a premium for thinner networks, and the outcome of the inquiry may determine whether services are sustained. Readers should watch for the final report and any policy response.
What happens next
The Productivity Commission will hold public hearings and deliver its final report in April 2027.
Further reading
Explore more on Air Travel to see how regional routes and fares are shaping flying across Australia.
Live Poll
Do you think flights from your local region have become less affordable recently?
