In brief:
- The budget airline would offer flights between Sydney, Melbourne and Brisbane, before expanding.
- Experts warn that industry competitors would go to lengths to see the proposed airline flop.
Australia’s aviation market may soon experience a shake-up with the potential emergence of a new budget airline, set to challenge the status quo by slashing ticket prices on the nation’s most frequented routes. However, experts caution that this fresh entrant will face formidable resistance from established airlines.
Backed by former Qantas executive Peter Kelly, the proposed airline, Zinc, seeks to position itself as a low-cost alternative for Australian travelers. Drawing inspiration from Europe’s budget carrier, Ryanair, Zinc promises to offer the most affordable domestic airfares. Initial plans include services along the pivotal “Golden Triangle” connecting Sydney, Melbourne, and Brisbane, with future expansions to Adelaide and the Gold Coast.
While the journey ahead is fraught with challenges, Kelly remains optimistic about Zinc’s prospects. He believes the opening of the new Western Sydney International Airport will unlock sufficient flight opportunities to support the airline’s operations.
Historically, the Australian domestic market has been constrained by the limited number of available flight “slots” at Sydney’s Kingsford Smith Airport. This bottleneck has often put a cap on the number of flights airlines can operate, hindering new entrants from gaining a foothold. Kelly’s vision for Zinc, however, hinges on the capacity expansion offered by the new airport, which he sees as a critical factor in the airline’s potential success.
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 incumbent airlines.
‘More competition means lower prices’
Professor Rico Merkert, an aviation industry expert from Sydney University, 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 there’ll be pushback.
He says 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 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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