Virgin Australia domestic market share leader in early 2026

By Andrew Curran.

Virgin Australia enjoyed a rare victory over Qantas in January, having the largest Australian domestic market share in that month, according to the Australian Competition and Consumer Commission's (ACCC) latest quarterly report.

In its Domestic Airline Competition report, released today, March 24, the ACCC states that Virgin Australia flew 33.2% of all domestic passengers in January, while Qantas accounted for 33.0% and Jetstar had 32.6%.

Although holding its own air operator’s certificate, Jetstar is a part of the Qantas Group. Combining the two Qantas Group carriers, their total market share would have been 65.6% in January. However, the ACCC does not do this.

“This is the first January since 2022, and the first time since December 2024, that Virgin Australia has led the market in passenger share,” the report notes.

After the demise of the short-lived Bonza and voluntary administration and subsequent sale of Regional Express (Rex) in recent years, Australia’s domestic aviation sector has settled back into its familiar duopoly style pattern.

“The domestic airline sector continues to be dominated by two major airline groups,” the report adds.

Together, the Qantas Group carriers and Virgin Australia had a 98.8% domestic market share in January. Regional Express (Rex) mopped up the remaining 1.2%. Smaller scheduled passenger operators are not obliged to provide data to the ACCC and are not included.

Seasonal travel patterns benefit Virgin Australia

Qantas styles itself as a full-service airline, Virgin Australia as a mid-market hybrid carrier, and Jetstar as a low-cost carrier.

Would-be start-up Koala Airlines hasn’t progressed off the drawing board while financing and modifications its air operator’s certificate to allow it to operate jet aircraft remains a work in progress.

Typically, Qantas, with a larger fleet and more extensive domestic network, commands the largest slice of Australia’s domestic aviation market share.

But the ACCC said that Virgin Australia, with its focus on leisure travellers and small and medium businesses, benefited from seasonal shifts over the Australian summer holidays, when much of corporate Australia – Qantas’s domestic bread and butter, took January off and went to the beach.

“Different customer segments can impact on seasonal travel patterns, impacting on airline market shares,” reads the report.

Warning on air fare price rises

While the report noted the geopolitical crisis in the Gulf and recent spike in fuel prices, the period (November 2025 – January 2026) the ACCC canvassed pre-dates this.

However, in recent days, both Qantas and Virgin Australia have increased ticket prices to reflect rising fuel prices. Typically, jet fuel accounts for between 15 and 25% of an airline’s operating costs.

But Australia’s big airlines have also hedged a proportion of their fuel requirements, partially insulating them from short‑term increases in jet fuel prices. The Qantas Group has hedged 81% of its Brent crude oil exposure until June 30, 2026. However, the company has not disclosed its level of refining margin hedging, if any.

Similarly, a large portion of Virgin Australia’s Brent crude needs and refining margin remain hedged.

Across the Tasman Sea, and outside the scope of the ACCC’s report, Air New Zealand says it has hedged 83% of its fuel requirements through June 30.

But the ACCC has raised concerns about the impact of ongoing high fuel prices if the war continues into mid-2026.

It says airlines are free to increase air fares to recover higher operating costs, but they must not make false or misleading statements about the reasons.

“While market conditions will ultimately determine the cost of flying, we are closely monitoring price movements, market behaviour and the airlines’ representations to consumers, and will act if there is behaviour that contravenes competition and consumer laws,” warns ACCC Commissioner Anna Brakey.

The Commissioner also noted that capacity growth across Qantas, Jetstar, and Virgin Australia was a good thing from a passenger’s perspective.

She said as new aircraft continued to arrive at the three airlines, capacity growth would likely continue to outpace demand, helping put some downward pressure on air fares and helping dampen the full impact of increased full costs.

You can read the ACCC’s quarterly report here.

Photo: Getty Images.

Contact the writer: andrew@aerosouthpacific.com