New airline to launch in Australia and give Qantas a run for its money – and it has a very unique name

A new airline is coming to Australia that could lower ticket prices as it competes with Virgin, Qantas and the budget division of national carrier Jetstar.

Koala Airlines has unveiled its management team and logo. The Melbourne-based carrier hopes to take to the skies soon with a fleet of Boeing 737 Max 8 aircraft.

Australia currently has just two airlines operating flights between major cities after Rex and Bonza both went bust this year. Air travellers are paying the price, with a report showing the cost of flights has risen since then.

Rex and Bonza join a group of airlines that have tried to gain a foothold in the Australian market but have been permanently grounded, including Compass, Impulse, Ansett and OzJet.

Koala claims it will take a new approach by “creating a unique niche that enhances the industry landscape”, without seeking to directly compete with the big players.

‘Koala will be fundamentally different from previous entrants in a domestic market that has long been dominated by two major airlines since the Australian government introduced the Two Airline Policy in 1952.’

From that year onwards, only two airlines were allowed to fly on major routes, until the rules were relaxed in 1990. With the exception of Virgin, all airlines that have tried since then have failed.

Koala said these new entrants were primarily focused on cheaper fares, but that the “innovative” approach would put the customer experience first. Simply adding a third domestic airline would increase consumer choice and likely drive down prices.

The new airline will offer an alternative to routes already dominated by Qantas (stock image)

A report published this week by the Australian Competition and Consumer Commission (ACCC) found that average airfares fell by 25 percent when Rex entered the intercity market in 2021.

According to the Australian Domestic Airline Competition Report, airfares on some routes have risen again since Bonza and Rex left the market. The biggest price increase was on the Melbourne to Gold Coast route, by 38 percent.

“More competition means lower airfares, it’s that simple,” said Natalie Heazlewood, head of policy at the Australian Airports Association.

‘The latest ACCC report provides compelling evidence that this is true. When an airline pulls out, passengers pay the price.

‘Unfortunately, as with Rex and Bonza, there are a number of difficult obstacles facing challengers to the Australian aviation 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 already holds its Air Operators Certificate (AOC), which allows it to operate a commercial airline through a company it acquired in 2019: Desert Air Safaris.

The company is in the process of upgrading the AOC for the 787 MAX aircraft.

Koala claims it will take a new approach by ‘creating a unique niche that enhances the industry landscape’ without trying to compete directly with the big players (pictured: Sydney Airport)

Desert Air Safaris was founded by pilot Dick Lang and has been offering flights to remote areas of Australia, Papua New Guinea and the Pacific Islands for fifty years.

Koala said it would continue its “rich heritage” under the new brand name.

The new airline’s management team has a combined 300 years of experience, with founder Bill Astling having worked in the industry for 45 years.

He held positions 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 started flights to Australia.

He was also an aviation advisor to the Chinese Chamber of Commerce in Australia.