A proposed new low-budget airline could significantly reduce ticket prices across Australia's busiest aviation routes, though experts caution it will face immense challenges from existing carriers.
Zinc Airlines: A new contender in the Australian sky
Former Qantas executive Peter Kelly hopes to leverage his decades of industry experience to launch Zinc, a new airline modelled on British ultra-low-cost carrier Ryanair. The airline aims to offer the cheapest domestic tickets, initially servicing the "Golden Triangle" of Sydney, Melbourne, and Brisbane, with plans to later expand to Adelaide and the Gold Coast.
Kelly believes that the new Western Sydney International Airport provides the necessary volume of flights to make the venture viable, overcoming previous limitations posed by slot constraints at Sydney's Kingsford Smith Airport, which are largely controlled by incumbent airlines.
Expert insights on competition and pricing
Professor Rico Merkert, an aviation industry expert from Sydney University, said an ultra-low-cost airline like Zinc has the potential to drive down ticket prices across the board. "For customers it would be great. More competition means lower prices," Merkert said. However, he noted that Jetstar, a low-budget subsidiary of Kelly's former employer Qantas, would fiercely defend its most profitable routes. "They will do everything they can to make this a failure, in my view," he added.
Merkert also pointed to the collapse of Rex Airlines, which expanded from regional routes into the Golden Triangle and ultimately failed. Yet Kelly remains optimistic, citing the Australian Competition and Consumer Commission's (ACCC) appetite for more competition. "I don't think Vanessa Hudson wants to see Qantas on the front page with the ACCC filing against them for predatory practices," Kelly said.
Timing and market challenges
Merkert questioned the timing of Zinc's announcement, coinciding with a global fuel crisis and the recent bankruptcy of American ultra-low-cost carrier Spirit. "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 agreed that timing is critical for new airlines. "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."
Despite the hurdles, Kelly believes there is a strong appetite for more competition in Australia, and Zinc's lead-up prior to launch could create better conditions in the future.
