Ex-Qantas boss seeks to launch new budget Australian airline

An aviation industry expert said an ultra-low-budget airline could bring ticket prices down across the board.

Some experts have warned it's not an ideal time to launch a new airline, amid the global fuel crisis and the failure of ultra-budget US airline Spirit. Source: Getty / fhm

In brief

• The budget airline would offer flights between Sydney, Melbourne and Brisbane, before expanding.
• Experts warn that industry competitors would go to great lengths to see the proposed airline flop.

A proposed new budget airline could bring ticket prices down across Australia's busiest aviation routes, but experts warn it would face immense challenges from existing players.

Former Qantas executive Peter Kelly is backing new airline, Zinc, as a cheaper alternative for Australians.

Modelled on European low-cost carrier Ryanair, Zinc is promising the cheapest domestic tickets — initially between the "Golden Triangle" of Sydney, Melbourne and Brisbane, then Adelaide and the Gold Coast.

Unfazed by challenges, Kelly is firm that the new Western Sydney International Airport will enable enough flights for Zinc to be viable.

The Australian domestic market was previously impeded by a limited number of "slots" available for flights through Sydney's existing Kingsford Smith Airport.

Kelly said these are held by airlines that are already operating.

'More competition means lower prices'

Professor Rico Merkert, an aviation industry expert from the University of Sydney, said an ultra-low budget airline like Zinc has the potential to bring ticket prices down across the board.

"For customers, it would be great. More competition means lower prices," Merkert said.

However, he believes it will face pushback.

The proposed design of a new Zinc Airlines A321neo, which would seek to make fares cheaper for travelling Australians. Credit: Zinc

He said Jetstar, the low-budget subsidiary of Kelly's former employer, will fight to maintain its most profitable routes.

"They will do everything they can to make this a failure in my view," he said.

Defunct airline Rex expanded its regional roots to offer flights in the "Golden Triangle" — a decision that led to its collapse, Merkert said.

Kelly believes that there's an appetite for more competition in Australia, not least by the Australian Competition and Consumer Commission.

Considering the global fuel crisis and the recent failure of American low-cost airline Spirit, Merkert said it's "crazy" to launch an airline.

"It's an absolute crazy environment to set up an airline right now, when most other airlines are just trying to understand how they can survive," he said.

RMIT aviation expert Chrystal Zhang agrees that timing is critical for new airlines. However, she believes pre-launch preparation could see better outcomes for the airline's future.

"New airlines entering the market would face significant and very head-on competition from the incumbent airlines," she said.

"In theory, we need more airlines, but in reality, perhaps it's a different story."

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