A new airline is coming to Australia and will potentially drive down ticket prices by competing with Virgin, Qantas and the national carrier’s budget division, Jetstar.
Koala Airlines has revealed its management team and logo, with the Melbourne-based carrier hoping to soon take to the skies with a fleet of Boeing 737 Max 8 aircraft.
Australia currently has just two airlines serving major city routes after Rex and Bonza went bankrupt this year and air passengers are paying the price – a report reveals the cost of flights has been rising ever since.
Rex and Bonza join a group of airlines that have tried to establish themselves in the Australian market but have been permanently blocked, including Compass, Impulse, Ansett and OzJet.
Koala says it will take a new approach by “creating a unique niche that enhances the industry landscape” without attempting to compete directly with major players.
‘Koala will fundamentally differentiate itself from previous entrants in a domestic market that has long been dominated by two major airlines since the Australian government first introduced the Two-Airline Policy in 1952.’
From that year, only two airlines were able to fly on major routes until the rules were relaxed in 1990, although, with the exception of Virgin, all airlines that have tried since then have not lasted.
Koala said that while those entrants were primarily focused on cheaper fares, its “innovative” approach would put customer experience first, although simply having a third national airline would increase consumer choice and likely lower prices.
Koala Airlines has revealed its management team and logo, with the Melbourne-based carrier hoping to soon take to the skies with a fleet of Boeing 737 Max 8 aircraft.
The new airline will offer an alternative to travel routes already dominated by Qantas (file image)
A report released this week by the Australian Competition and Consumer Commission (ACCC) found that average airfares fell by 25 per cent when Rex entered the intercity market in 2021.
According to the Australian Domestic Airline Competition Report, since Bonza and Rex left the market, airfares on some routes have risen again, with the Melbourne-Gold Coast route seeing the biggest price increase of 38 per cent.
“More competition means lower airfares, it’s that simple,” said Natalie Heazlewood, policy director at the Airports Association of Australia.
‘The ACCC’s latest report provides strong evidence to support this and when an airline closes, passengers pay the price.
“Unfortunately, as we have seen with Rex and Bonza, there are a number of difficult obstacles facing challengers to Australia’s airline duopoly.”
Greg Bamber, a professor at Monash University and author of “Up in the Air,” agreed, saying Virgin and Qantas would raise their fares with fewer competitors.
“That’s what usually happens when there’s less competition – the dominant players raise their prices,” he told Daily Mail Australia.
Koala Airlines now has its Air Operator Certificate (AOC) allowing it to operate a commercial airline courtesy of a company it acquired in 2019: Desert Air Safaris.
It is in the process of updating its AOC for the 787 MAX aircraft.
Koala says it will take a new approach by “creating a unique niche that enhances the industry landscape” without attempting to compete directly with the major players (pictured, Sydney Airport)
Desert Air Safaris was founded by aviator Dick Lang and operated for five decades offering flights to remote regions of Australia, Papua New Guinea and the Pacific Islands.
Koala said it would continue that “rich heritage” under its new brand.
The new airline’s management team has a combined 300 years of experience, with founding CEO Bill Astling working in the industry for 45 years.
He has held 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 several Chinese airlines that have started flights to Australia.
He was also an aviation consultant to the Chinese Chamber of Commerce in Australia.