Aussie return to the skies remains slower than expected

Australian air travel is yet to return to pre-pandemic levels, as airline closures impact domestic flight availability and business travel policies remain "sticky", an aviation conference has heard.

But airlines are still positive about the industry's future, with Air India deploying more planes and Qantas committing to expanding international routes and investing in longer flights and sustainable aviation fuel.

The revelations were made at the CAPA Airline Leader Summit in Brisbane on Thursday, which attracted more than 450 representatives from the travel industry.

Centre for Aviation research head Simon Elsegood said Australians' domestic travel habits had been on track to return to 2019 levels, but hit turbulence when Bonza and Rex went into administration.

"Six months ago, we were at 98.5 per cent and we were trending very strongly up to be at full recovery before the end of the year, however, we've had a few speed bumps in the domestic market," Mr Elsegood told the conference.

"At the moment, we're sitting at about 92 to 93 per cent of pre-pandemic levels in the domestic market."

Mr Elsegood said Australia's international travel recovery also fell short of 2019 levels, with business travel to other countries stable at 70 per cent of pre-pandemic levels.

"What we're seeing is the policies companies put in place during COVID have been very sticky - layers of additional approvals and extra scrutiny on travel budgets has not gone away," he said.

"Once you adjust for inflation, we're still missing somewhere around $500 million a year (of) international business spending in the Australian market."

Airline executives told the conference they continue to expand fleets and routes, with Air India chief executive Campbell Wilson saying the carrier planned to offer more services to Australia "as soon as we get aircraft".

Qantas international chief executive Cam Wallace said the company was awaiting deliveries of Airbus A31XLR planes with a greater range and more premium seating, and planned to expand its Perth hub to offer more flights to Africa and Europe.

Mr Wallace predicted Australian domestic travel would also bounce back, with the return of "a third and fourth and fifth competitor" to the market, as consumers had proven they still wanted to visit interstate friends and family members.

"We still see customers at a higher level prioritising travel over other categories," he said.

"That gives us some confidence for the future that people have changed their purchasing habits, that they really see travel as a high priority."

Mr Wallace said Qantas was also focused on reducing emissions from air travel, and had secured 500 million litres of sustainable aviation fuel through its partnerships with Airbus and Boeing.

He said Australian businesses had a significant opportunity to produce and supply the environmentally friendly jet fuel to Qantas and the rest of the world, using agricultural waste.

"Our big desire and motivation and drive is to work with government to create an industry in Australia," he said.

"We think Australia is perfectly positioned in terms of its geographic location, size of the country, how many people live here, to really supercharge jobs and growth around a sustainable fuel industry."

Several projects to produce sustainable aviation fuel are under way in Queensland and Western Australia, including a refinery planned by Wagner Sustainable Fuels, another headed by Ampol, and plans to transform BP's Kwinana Energy Hub.