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Domestic airlines have been warned they are being watched by the competition watchdog to make sure they add extra seats to bring down the cost of air fares after they hit a 15-year high.

An Australian Competition and Consumer Commission airline monitoring report found December fares were about 27 per cent higher than they were in October 2019.

With discount fares selling quickly, the cost of flying had doubled since April to reach the highest level since 2007.

“The ACCC will be monitoring the domestic airlines closely to ensure they return capacity to the market in a timely manner to bring downward pressure on airfares,” the report says.

“In this context, the ACCC would be concerned if the airlines withheld capacity in order to keep airfares high.”

Sydney Airport is expecting 2.2 million passengers from December 12 to January 1.

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