Airlines produced their worst on-time performance on record between April and August, despite budget airfares spiking 56 per cent in the same quarter.

That’s according to the Australian Competition and Consumer Commission’s latest airline competition report, finding the cheapest economy fares had sharply risen from their 11-year low recorded in April.

Demand for air travel is red-hot in the post-lockdown period, but the industry remains struggling to cope as it rebuilds workforce and continues to battle staff illness.

The report also found flights are being cancelled at a staggering rate, more than three times the long-term average.

ACCC chair Gina Cass-Gottlieb said competition between airlines was as important as ever given the battling pressures.

“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,” she said.

“Discount economy airfares in August were at their highest point in almost two years.”

Ms Cass-Gottlieb said the ACCC was engaging with airlines to try to understand the nature of the problems they faced.

“We are aware that for many consumers, long-awaited travel fell well short of expectations with record delays, very high rates of cancellations, lost baggage, and long wait times for call centres,” she said.

“We expect that airlines will be honest and proactive in communicating to passengers the reasons why a flight is delayed or cancelled, how the consumer guarantees apply, and what other compensation they are entitled to.”

The ACCC said airlines had said on-time performance was beginning to recover with fewer staff suffering illness, but also due to running less flights.

But the report found the appetite for travel was surging, with the 4.7 million domestic passengers who travelled in July the highest monthly figure since the pandemic began.

That’s also 89 per cent of passenger volume from July 2019, the peak domestic travel month.

– AAP