Travellers can expect to enjoy cheaper domestic airfares for a little longer, as Australia’s major carriers keep adding seats into the local market.

Qantas chief executive Alan Joyce says that although the recent surge in capacity was slowing, there were still too many domestic seats for the airline group to begin raising yields, or average airfares per passenger.

“We still face a tough environment with a high degree of capacity growth in the market, pushing down yields and profitability,” Mr Joyce told the Macquarie investment conference on Friday, according to prepared remarks.

“While we do not expect any improvement this half, capacity growth is alleviating, which will lead to a healthier domestic capacity position in FY14.”

Australia’s domestic airlines lifted capacity by 10.8 per cent in the six months to December 2012 – the highest increase in eight years.

However, the latest traffic figures so far in 2013 from both Qantas and Virgin suggest the period of rapid capacity growth was coming to an end.

The high degree of volatility and uncertainty in fuel prices, foreign exchange, the global economy and “competitive developments” meant it was not possible to provide full year profit guidance at the moment, Mr Joyce said.

He said Qantas would continue to book transition costs in the second half of 2012/13 as a result of its global partnership with Emirates and other changes aimed at returning Qantas’ international operations to profitability.

“We’ve always made it clear that long-term gain can’t be achieved without the short-term cost of transition,” Mr Joyce said.

“There will be cost impacts within the second half of FY13, which is typically the weaker half in each year.”

Those transition costs included a $50 million impact of switching Qantas’ hub for European flights from Singapore to Dubai.

At 1243 AEST, Qantas was down half a cent at $1.845.