A new airline is set to open in Australia and will potentially bring down ticket prices as it competes with Virgin, Qantas and the national carrier’s budget arm Jetstar.
Koala Airlines has revealed its management team and logo, with the Melbourne-based airline hoping to soon hit the skies in a fleet of Boeing 737 Max 8 aircraft.
Australia is currently down to just two carriers between major city routes after Rex and Bonza both went into administration this year and air travellers are paying the price, with a report finding the cost of domestic flights has since been climbing.
Rex and Bonza join a group of airlines that have tried to establish themselves in the Australia-wide market but have been permanently grounded including Compass, Impulse, Ansett and OzJet.
Koala claims it will avoid the same fate by ‘carving out a unique niche that enhances the industry landscape’ without trying to directly compete head-to-head with Qantas and Virgin.
‘Koala will fundamentally differ from previous entrants in a domestic market which has been long dominated by two major airlines since the Australian government first introduced the Two Airline Policy in 1952.’
From that year only two airlines were allowed to fly major routes until the rules were relaxed in 1990 though, with the exception of Virgin, all carriers who have tried since have not lasted.
Koala said while those entrants focused primarily on cheaper fares, it’s ‘innovative’ approach would put customer experience at the forefront, though simply having a third domestic carrier would increase consumer choice and likely drop prices.
Koala Airlines has revealed its management team and logo, with the Melbourne -based airline hoping to soon hit the skies in a fleet of Boeing 737 Max 8 aircraft
The new airline will offer an alternative to travel routes already dominated by Qantas (stock image)
A report released this week by the Australian Competition and Consumer Commission (ACCC) found the average airfare dropped by 25 per cent when Rex entered the intercity route market in 2021.
According to the domestic airline competition in Australia report, since both Bonza and Rex left the market airfares on some routes have risen again, with the Melbourne to Gold Coast route seeing the steepest price increase of 38 per cent.
‘More competition means lower airfares, it’s as simple as that,’ Australian Airports Association Head of Policy Natalie Heazlewood said.
‘The ACCC’s latest report provides solid evidence to support this and when an airline exits, passengers pay the price.
‘Unfortunately as we’ve seen with Rex and Bonza, there are a number of difficult obstacles facing challengers to Australia’s airline duopoly.’
Monash University professor and ‘Up in the Air’ author Greg Bamber agreed and said Virgin and Qantas would increase their fares with fewer challengers.
‘That’s what generally happens when there’s less competition – the dominant players put up their prices,’ he told Daily Mail Australia.
Koala Airlines already has its Air Operators Certificate (AOC) which allows it to run a commercial airline.
The AOC came through the acquisition of Desert Air Safaris in 2019.
It is is in the process of upgrading its AOC for the 787 MAX aircraft.
Koala claims it will take a new approach by ‘carving out a unique niche that enhances the industry landscape’ without trying to directly compete head-to-head with the major players (pictured, Sydney Airport)
Desert Air Safaris was founded by aviator Dick Lang and ran for five decades offering flights to remote regions in Australia, PNG and the Pacific Islands.
Koala said it would continue that ‘rich heritage’ under it’s new branding.
The new airline’s management team have a combined 300 years experience with founding CEO Bill Astling working in the industry for 45 years.
He has had roles with Singapore Airlines, Air India, Angel Airlines, Merpati Indonesia, Sri Lankan Airlines, Jes Air, Antonov Airlines, Malaysian Airlines, Lao Aviation, Vietnam Airlines, Sahara Airlines and various Chinese Airlines starting flights to Australia.
He was also the aviation consultant to the China Chamber of Commerce in Australia.
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Read more at DailyMail.co.uk