A new study has revealed a battle playing out above Australia’s skies, with Virgin Australia increasingly mirroring Jetstar’s pricing , but only if you book early enough.
Researchers from the University of South Australia and China’s Capital University of Economics and Business analysed fare data across four of the nation’s busiest domestic routes: Sydney–Melbourne, Sydney–Brisbane, Sydney–Gold Coast and Brisbane–Melbourne.
Their findings show a three-tiered fare hierarchy with Qantas leading the pack, Jetstar the budget option, and Virgin positioned somewhere in the middle.
The research highlights that Virgin is willing to shadow Jetstar’s pricing when travellers book 28 to 60 days before departure. Within this booking window, Virgin’s fares often drift closer to its low-cost rival’s, an effort to capture budget-conscious leisure travellers.
But the story changes dramatically for last-minute bookers. For those buying within three weeks of departure, Virgin shifts its pricing strategy to align more closely with Qantas, targeting premium and loyalty-driven customers instead of chasing the budget market.
“Virgin is walking a fine line between cost and service differentiation,” explains lead researcher Professor Shane Zhang. “For early bookers, it moves closer to Jetstar’s model, while for late bookers it leverages its frequent flyer program, business class product and full-service positioning to attract higher-yield customers.”
The strategy reflects Virgin’s evolution since the closure of its low-cost subsidiary Tiger in 2020. Now firmly a hybrid carrier, Virgin has clawed back around one third of the domestic market, setting itself up as a formidable rival to both Qantas and Jetstar.
Meanwhile, Jetstar continues to play its part in the Qantas Group’s dominance, now carrying one in three domestic passengers. Together, Qantas and Jetstar hold a combined 65% market share.
But the study also casts a spotlight on a practice that disadvantages consumers: the steep fare hikes imposed by all three airlines close to departure.
“While not illegal, tacit collusion in Australia’s duopoly market is bad news for travellers, leading to inflated late-booking fares,”
Prof Zhang warns. “It’s an area regulators should be watching closely.”
The research, published in Research in Transportation Business and Management, suggests Qantas may need to reinforce its premium credentials as Virgin pushes deeper into its territory, while also allowing Jetstar more room to take on Virgin directly.
As competition patterns grow more complex, one takeaway for travellers is clear: the sweet spot for booking domestic flights with Virgin is 28 to 60 days in advance, where the fares are often closer to Jetstar’s, but with the added perks of a full-service airline.
