Jetstar will start charging domestic passengers between $25 and $39 to put a bag in the overhead locker from 2 February 2027, and up to $52 on international flights. Jetstar chief executive Steph Tully said the new model "provides more choice to customers while helping to keep our fares low".
So we priced a real trip to see what a low fare on Jetstar actually costs.
On 5 August we priced a Sydney to Melbourne return for one adult on the Jetstar, Virgin Australia and Qantas booking engines. The trip flew out on Friday 18 September and back on Sunday 20 September. That's 44 days ahead, which matters for reasons we'll come to. Nothing was booked.
On the sticker, Jetstar won. Its cheapest Starter fare came to $253 return, $119 out and $134 back. Virgin's cheapest Lite fare came to $270, a flat $135 in each direction. Qantas came to $370, a flat $185 each way.
Then we added one suitcase, and the order changed.
Jetstar's $119 Starter fare buys 7kg of carry-on and not much else
Starter is the number that lands at the top of every comparison site. On the 6am Friday service it was $119.
Jetstar's own fare grid sets out what that covers: 7kg of carry-on baggage, and a seat the airline picks for you.
Checked baggage isn't in it, and the booking engine offered 15kg "from $34.00". Seat selection isn't in it either, listed as "Add later or get a free allocated seat". Under Qantas Frequent Flyer and Qantas Business Rewards, the grid says "Not available" on both.
Add the cheapest checked bag and that $119 fare becomes $153. You still can't choose your seat, and you still earn nothing.
Virgin's Choice fare costs $10 more than its cheapest and throws in a 23kg bag
Virgin's entry fare, Lite, was $135 that morning on VA800. It behaves much like Jetstar's Starter: the fare grid lists both seat selection and checked baggage as "For a fee".
The fare directly above it is where the comparison falls apart. Virgin's Choice fare was $145, just $10 more than Lite. For that $10 Virgin includes one 23kg checked bag and seat selection.
Same route, same morning, one checked bag and a seat of your choosing: $145 on Virgin, $153 on Jetstar. Virgin came in $8 under, and carried 8kg more.
Qantas charges the most up front and the least afterwards
Qantas was the dearest on the sticker at $185 each way, and it didn't budge all week. Every day from Tuesday 15 September to Monday 21 September was $185.
The Red e-Deal, Qantas's cheapest economy fare, lists checked bags as included, seat selection as included, and 800 Qantas Points. Changes cost $121, and it can't be refunded.
Against Virgin's Choice fare that's a $40 premium. Against Jetstar once a bag goes in the hold, it's $32.
| Fare | One way | With one bag |
|---|---|---|
| Jetstar Starter No checked bag, no seat choice, no points | $119 | $153 |
| Virgin Lite Bag and seat both cost extra | $135 | Fee not shown |
| Virgin Choice 23kg bag, seat selection, Velocity points | $145 | $145 |
| Qantas Red e-Deal Checked bag, seat selection, 800 points | $185 | $185 |
Sydney to Melbourne one way, Friday 18 September 2026, one adult. Prices captured from each airline's own booking engine on 5 August 2026. Payment surcharges are additional in every case.
Turn up at Sydney Airport with an unpaid bag and Jetstar charges $120
The distance between the online price and the airport price is where a cheap fare stops being cheap.
Jetstar's published airport prices put the first 20kg of checked baggage bought at an Australian domestic airport at $120. The same bag bought online started at $34 in our search. Every extra kilogram beyond the allowance costs $30 at the airport.
A $119 Starter fare with a bag paid at the gate is $239. That's more than a Qantas Red e-Deal, which includes the bag, the seat and the points.
Jetstar, Virgin and Qantas all charge you again at the payment screen
Jetstar applies a payment fee to every booking made in Australian dollars. It's 1.11% on a Mastercard credit card, 1.06% on a Visa credit card and 1.06% on American Express. Debit is cheaper at 0.48% and 0.36%, while PayID, vouchers and gift cards are free.
Virgin's booking engine says a surcharge applies "for debit card (0.47% to 0.52%), credit card (1.06% to 2.27%), Apple Pay (0.47% to 1.06%), PayPal (0.99%) and Zip (1.27%)". Virgin's credit card surcharge tops out at 2.27%, more than double the highest card rate Jetstar charges.
Qantas gets to the same place by a different road. Its advertised prices are "based on payment at qantas.com by BPAY made 7 days or more before departure, or PayID". Pay any other way and, in Qantas's own words, "a fee applies".
From 2 February 2027 a Jetstar Starter fare stops including the overhead locker
Jetstar's checked baggage page currently states that "carry-on baggage is included with all bookings". That changes on 2 February 2027.
The Australian reported that under the change a Jetstar fare will include an "underseat" item only, such as a backpack, handbag or laptop. Anyone wanting a standard carry-on suitcase in the overhead locker will have to buy priority carry-on, which also brings early boarding and lifts the allowance to 10kg. Jetstar's website says priority carry-on "can be purchased (subject to availability)", so paying is not a guarantee of a spot. Jetstar will stop weighing bags at the gate, a practice it said had been "frustrating for customers and crew".
Jetstar is already charging for carry-on in a quieter way. On our Friday flight it sold a Flex bundle badged "Extra carry-on and flexibility", offering 14kg of carry-on against Starter's 7kg, for $177 against Starter's $119. The 2027 change doesn't start that practice, it moves the charge down to the locker itself.
Flight Centre managing director Graham "Skroo" Turner told the Daily Telegraph the move took the low cost model to an extreme. "Are they expecting people not to take any luggage with them? Why not just include it in the ticket," he said.
Rex flies Saab 340s now, and that leaves two groups running the route
A locker fee can be introduced with very little risk when there's almost nobody left to lose passengers to.
Rex once ran Boeing 737s between Sydney and Melbourne. Its website now describes it as "Australia's largest independent regional airline operating a fleet of Saab 340 aircraft to 51 destinations throughout all states in Australia", and notes that Regional Express Holdings is "a wholly owned subsidiary of Air T, Inc". It doesn't compete on this route at all.
That leaves the Qantas group, which owns Jetstar, and Virgin.
Professor Shane Zhang found Virgin chases Jetstar early and abandons it late
Research led by Professor Shane Zhang at the University of South Australia, reported in September last year, tracked fares on Sydney to Melbourne, Sydney to Brisbane, Sydney to the Gold Coast and Brisbane to Melbourne. It put Qantas at the top, Jetstar at the bottom, and Virgin moving between the two.
Zhang found Virgin matches or undercuts Jetstar between 28 and 60 days out from departure, then drifts up towards Qantas inside the final three weeks. Our search sat 44 days out, squarely inside that window, and Virgin's pricing behaved exactly as described. Book the same trip a fortnight before flying and the result would likely look very different.
He also flagged what happens with only two groups left in the market. "While not illegal, tacit collusion in Australia's duopoly market is bad news for travellers, leading to inflated late-booking fares," Zhang said.
Virgin sat on about $90 million in COVID credits and made customers book by 30 June
Virgin's recent record explains why plenty of travellers are wary of handing it money in advance.
Customers holding COVID era flight credits were given a deadline of 30 June this year. The ABC reported in June that they had to book and complete their travel by that date or lose the money. Roughly $90 million in credits was still outstanding.
Under pressure, including from the ACCC, Virgin moved partway. Its commercial policy, updated on 19 June, says COVID credit tickets were "extended to purchase by 30 Jun 2026 travel up until 27 May 2027". Customers still had to spend the credit by 30 June. They simply got longer to take the flight.
It wasn't the first extension either. In November 2022 Virgin pushed the expiry of its flight credits from the end of January 2023 out to the end of December 2023.
VietJet has asked CASA for a licence to fly Australian domestic routes
The one thing that could reset these numbers is a third operator.
The Australian Financial Review reported in late June that Vietnamese low cost carrier VietJet had applied to the Civil Aviation Safety Authority for an air operator's certificate, the licence an airline needs before it can fly here. The report said VietJet wants a locally based arm flying 10 Boeing 737s on the Sydney, Melbourne and Brisbane routes. The report was picked up across the aviation trade press including FlightGlobal and Australian Aviation.
The application hasn't been approved, and nothing about it is settled.
What actually makes a Sydney to Melbourne trip cheapest
On our numbers, it comes down entirely to the bag.
Travelling with nothing but a small bag that fits under the seat, Jetstar's $253 return was the cheapest, $17 under Virgin and $117 under Qantas.
Put a suitcase in the hold and pick where you sit, and that advantage is gone.
From 2 February 2027, that small bag under the seat is the only thing a Jetstar Starter fare guarantees.
The other habit worth breaking is checking one airline, on one day. Across the week we searched, Jetstar was the only one of the three that moved its price at all.
| Fare | Cheapest day | Fri 18 Sep |
|---|---|---|
| Jetstar Starter Moved every few days | $89 | $119 |
| Virgin Lite Same price all week | $135 | $135 |
| Qantas Red e-Deal Same price all week | $185 | $185 |
Sydney to Melbourne one way, cheapest fare on each airline across Tuesday 15 to Monday 21 September 2026. Only Jetstar changed its price during that week.
We happened to price the most expensive Jetstar day of that week. The day before, the same seat was $89. Virgin and Qantas would have charged the same on either day.
