Crisis in the skies: when will Australia’s aviation industry get back to normal?

For their first overseas trip since the pandemic, Lianne and Grant Francis planned to be in Bali on their 23rd wedding anniversary - but instead spent their special day in transit after Jetstar cancelled their original flight.

Lianne says among those waiting four hours at the gate, only for the outbound flight to be cancelled, was a woman with her husband - who uses a wheelchair and lives with dementia - for what would be their last trip together. There were also kids in tears waiting to board , while others forked out thousands of dollars booking alternative flights with other airlines.

The Francises were not alone in Bali, with more than 4,000 travellers affected by multiple Jetstar flight cancellations since the beginning of the month. But Jetstar's woes this past fortnight were just the latest chapter in the story of an aviation industry in crisis.

A damning report from the consumer watchdog has criticised airlines for high domestic air fares. Ground handlers in Qantas' supply chain have threatened strike action. And the ABC's Four Corner's program has brought into stark relief the decline in the national carrier's reputation for reliability.

Domestic air fares have shot up 56% in the past four months due to high cost of jet fuels and upward pressure from decisions to cut capacity, according to the Australian Competition and Consumer Commission (ACCC)'s latest Airline Competition in Australia report.

Guardian Australia reported earlier this week on the air fares close to $1,500 diehard Collingwood fans are facing for return flights to Sydney for the AFL preliminary final on Saturday. However, at the same time as Australians are paying more for their tickets, the ACCC report shows the domestic airline industry reported its worst on-time performance on record, while airlines cancelled flights at a rate over three times the long-term average.

The report also revealed the ACCC was investigating whether Qantas' conduct raised concerns under the Australian Consumer Law, as the watchdog said it was aware customers had experienced a "number of issues" with the national carrier, including over flight credits.

The chair of the ACCC, Gina Cass-Gottlieb, says "as a general principle, Qantas and other airlines need to make a realistic assessment of how many flights they can serve".

The ABC's Four Corners spoke to current and former staff of Qantas, including pilots, flight attendants and baggage handlers, who claimed ruthless cost-cutting was to blame for the airline losing its way.

Ground handlers in Qantas' supply chain recently threatened industrial action due to the prospect of pay and conditions going backwards, according to the transport workers union.

Dnata handlers had planned a 24-hour strike on Monday 12 September, which was cancelled after workers reached an agreement with the company on a new collective bargaining agreement in Australia. Meanwhile, Menzies ground workers in NSW and Victoria secured a commitment from their company for pay increases and to insource all operations currently outsourced after preparing to move to a protected action ballot, the transport workers union said in a statement on Thursday.

Qantas has said staff shortages due to Covid-19 were behind the problems, but at one point appeared to blame customers for delays, saying they were not "match fit".

Following staff layoffs due to Covid-19, Andrew Charlton, the managing director of independent air transport consultant Aviation Advocacy, says the "industry (including Qantas, of course) is going hell for leather to re-recruit staff", accompanying an industry-wide reckoning that better working conditions and pay were necessary.

The long-term storage of planes during pandemic border closures has also caused problems - including engine failures - when aircraft have been reanimated, with the civil aviation safety authority identifying "aircraft waking up grumpy" as a syndrome of the mothballing.

Qantas and other international airlines had also retired their jumbo Boeing 747s early when the pandemic hit, though Project Sunrise has seen Qantas acquire 12 A350s, which will fly nonstop from Australia to locations like London and New York.

Prof Rico Merkert, the chair in transport and supply chain management at the University of Sydney's Business School, says one post-pandemic trend was for more narrow-body aircraft. Merkert says the trend for smaller aircraft would also help airlines combat volatility on the demand side.

While Merkert says there is no shortage of aircraft, he says staff shortages and training is the "main challenge" as the Australian aviation industry recovers from the pandemic. According to him, however, "all airlines in Australia are recovering" boosted by freight, frequent flyer programs and small-to-private corporate jets, which all helped maintain cashflow during the pandemic.

Tim Ryley, the professor of aviation at Griffith University, believes "it will be another year or two before we get to some form of stability in the industry, in a similar way to times before Covid-19".

Charlton says "given the turbulence this (northern) summer", most in the industry estimate recovery in 2024, but the depth of the predicted recession remains an unknown. Merkert, meanwhile, says he is more optimistic in believing travellers will see improvements in early next year, for two reasons.

The first is the swift rebound in travellers wanting to fly again, with the airlines themselves surprised by the "pent-up demand". Second, he believes travellers will see improvements in on-time performance, because airlines are now aware of the issue and that their business model depends on it.

Merkert says the airlines "know they have to improve, because they want people to be confident flying again".