Bonza made the huge mistake of thinking it could induce demand in regional towns. Had they flown ATR 72s like Citilink or Cebu Pacific do, they might have been able to profit off their regional routes, instead of thinking they could fill the 737 MAX through low fares.
One thing that most people forget are the huge costs in the booking system. Regardless of who they manage to 'host' with, they will be paying a large amount in fees to both the 'host' system AND, the Global Distribution Systems who charge a fee just for booking a seat *see note*, regardless of whether it actually turns into a sale. And then, there are landing fees, etc. These hidden costs are overlooked by the flying public who only see the Fare and who have no idea of where the profit is supposed to come from. In fact, it's a wonder that many airlines even manage to make a profit these days ? *Note* In my 41 years designing airline systems, one of the many challenges was to try and stop fictitious agents from making thousands of false bookings and just living on the kickbacks they got from the GDS fees !!
I honestly think Rex would have better off to recapitalise their regional fleet with the ATR-42 instead of their foray into the capital city routes. With previous attempts to start a third major airline failing due to low load factors, would something a bit smaller like the A220 be a more economical answer lower risk platform then the 737?
Who knows what was going through the minds of the board and leadership team? That risky intercapital move should have been canned as soon as it was clear Virgin would be saved. Anyone who buys the brand is going to be saddled with a fleet of mostly sad old Saabs and a half billion dollars of debt that's growing by the day. If I could whip out my crystal ball imagine that it’s going to go into liquidation and National Jet Express and maybe Pel Air will be snapped up. it’ll be then on the governments to scramble to find and appoint alternative providers for some of the routes.
Correct but the start up costs would be way higher than starting with pre-owned 737s. The training of cabin crew and tech crew on a new type costs more when they can just hire staff who have operated 737s before. So long story short, no, opting for an A220 model would be worse
100% agree but i would have stuck with Saab 2000 that would have kept maintenance and re training for flight/cabin crew, engineering costs down, and then with the larger capacity and longer range they could have operated syd/mel or syd/bne
@@mjr320 only 63 Saab 2000’s were built, and they have been out of production for 25 years. You don’t replace an orphan with another orphan. The ATR-42 is in current production now, and if ordered back when the 737’s were originally leased would have been available relatively soon.
@@stephen_1987 great point, so maybe it might be time for a major fleet upgrade and in that case the ATR is a great option which has multiple size options as well for higher load factor routes, and i dont think if they desperately want to use a jet then the a220 or smaller jet would be all they need
Once Western Sydney airport is open I can see room for a third player in the Australian market. Let’s hope they don’t run out of cash before then though.
@@fyshi6226 yes as long as Virgin and Qantas own the rights to airport slots of course they'll only be two. That's how cartels work. Hint: flying population isn't a problem
@Seurnn it is if they can cancel half their flights and not delay anyone significantly there isn't enough people flying, and with the limited slots rex had they could barely get the planes 50% full despite having a frequent and cheap service
We have a long history of startups going broke here in Canada. The most recent failure was Lynx. Our duopoly is Air Canada and WestJet (themselves once a regional startup), plus Porter quietly growing and doing a lot of things right.
My wife and I were looking to travel to Perth and nearly booked on Rex when they announced ADL/PER services. In hindsight, I'm glad we didn't. Their web site offered some quite bizarre routings for Adelaide to Perth, which showed their regional underpinnings. One of the routes we were offered was Adelaide -> Broken Hill -> Sydney -> Melbourne -> Perth. Rex at the time had direct flights between all of those capital cities, so ADL/PER direct was possible. As was ADL/SYD/PER and ADL/MEL/PER, so I have no idea why they wanted us to go to Sydney and Melbourne. Via Broken Hill seems like a unique way to get to Sydney though, might have to try that one day! :)
Virgin wasn't originally one of the "big 2". That was Qantas & Ansett, dating back to when Qantas was Government-owned & the 2 Airline policy basically ensured that Ansett didn't even have to compete. It just had to be there. Ansett didn't fail because of market share, it failed because of management neglect & Virgin just happened to be in the right pace at the right time to pick up that much of their market. Ironically, when Virgin collapsed due to the imact of Covid (& the fact that the half-dozen other airlines that owned it were having their own same problems & had no spare cash to keep it afloat), Rex tried to replicate the same stunt, not only trying to take over Virgin's market but even doing it with Virgin's planes, repainted Rex on the outside but still Virgin on the inside, including the flight crews. To Rex's horror however, Virgin came back pretty quickly. Bailed up with private equity, Virgin sought to regain it's prior place & Rex was basically stuffed. Then Bonza comes in with a plane with a not-great reputation which was too expensive to operate for the routes it was servicing. Q400's would have been better. Plus from what I heard it was screwed over by it's foreign owners who weren't paying the leases. So good luck Koala (not). It sounds tacky & gimmicky, & seems like they're about to make the same mistakes as Rex & Bonza combined! I give them 0 - 6 months.
TAA changed name to Australian Airlines, then became Qantas, as Qantas after Qantas was allowed to operate domestic flights (up to 1990s, only flown international routes).
Compass Airlines, Air Australia, OzJet, Bonza, Rex I've seen them all come and go and chances are Koala Airlines will join this list. The established big players have the industry under their control and they won't allow any new upstarts to rock the boat.
So,hope they fly high and often. When I started flying in 1981 our customer service was A plus, we the crew were the entertainment we spoke to pax had a laugh and more crew on board.
Did not realize the max was still flying or could fly in Australia, as it seems to be on the scrappage list for Boeing. The only aircraft which might work regionally is the A220 xl. Perhaps dynamic pricing was the right pricing model....call it easy jet Australia...after all Norfolk Island is a obvious route. same with northern routes.
I definitely will use them if they fly to regional towns. I traveled with Bonza numerous times as it suited my needs without going to the capital cities and each time the plane was full.
Another domestic carrier may have a slim chance with Sydney's second airport opening if they can operate from it. The fact Bonza was priced out of Sydney Airport and Rex was already being price gouged to use Sydney Airport was already a big challenge.
My understanding was that Bonza's business model was actually successful. The problem was that the company overseas who leased the aircraft to Bonza, we're in financial difficulties and had to take the aircraft back.
IMO their business idea was good but they couldnt run on the important routes (sydney to melbourne and other state capital routes) due to slot hoarding by other airlines and de to this, they were flying large, expensive aircraft (737 Max 8) on routes that simply did not have enough demand to fill said aircraft. Additionally, fierce competition from Qantas and Virgin, who have much more money, were able to undercut airfares on Bonza's routes.
if the government wants more competition in the sector they need to give some legislative support to the smaller guys trying to get in - maybe somehow with slots, terminal facilities, costs for smaller players etc - otherwise the current duopoly seems set to continue to exclude competitors at considerable cost to the travelling public and businesses. If they can legislate against monopolies and break up monopolies then doing a bit to support long term viable competition in the sector should not be asking too much.
imo it's a little bit of both. leasing company blindsiding them combined with lack of profitability. it was evident they were losing money after they began rapidly downsizing their services.
@@StefanDrury I’ll keep setting them up for you. 😀 Australia is big as is the USA. I think following the model of Southwest Airlines (which copied a lot from PSA, which is a story yet to be told on UA-cam) is the way to go. It’s worked well or extremely well for everyone that’s tried and committed to it. Ryan Air being a stellar example. Australia has about 10% of the US, so the network will never be as vast, but it’s an idea worth considering.
I think the strategy is to come up with something completely unique. Like fly internationally out of regional airports providing regional residents an alternative to having to go to the major cities to fly out of Australia
thats a good idea, but then heaps of regional airports would need to go under massive renovations to accompany for the thousands of extra tourirts and people coming through. also i dont know if most regional airports would have the security standard for international flights.
Cairns has a population of 150k and has flights to New Zealand, PNG, Indonesia, China, Japan and Singapore. Broome has a population of 14.7k and has flights to Singapore.
The airline industry in Australia does seem to favor a duoploy for some reason. If you remember far enough back there was also Compass which tried at least twice and failed both times. I remember when Virgin was the third challenger airline, and there's an argument for their survival being due to the failure of Ansett at the right time leaving Qantas and Virgin as the two remaining, I hope Koala can find a niche and survive. Challenging Qantas and Virgin on price isn't it, ideally it would be something the two incumbents can't or won't do, but I have no idea what that might be.
Despite them flying 10's of thousands of hours since the incidents without issue? You could die driving your car to work tomorrow but you dont care about that.
Good overview Stefan. No mention of Jetstar? Perhaps use Qantas Group and mention Jetstar. Why? Well just a piece of the puzzle really. I mean how much effect does the Qantas low cost carrier have on new starters? Heaps I would think.
Thank you, I kind of lumped Qantas and Jetstar into the same bracket here. Qantas can counter competition at both the corporate and leisure levels, full fare and low price through the two brands. But fair point it’s more the Qantas group not just that particular brand.
The only way an airline can take on Qantas and Virgin is to do something *fundamentally different* that they cannot undercut them on, and which is also sustainable in regard to cost and demand. Aside from being a small player doing very niche routes, I truly believe the only solution to this conundrum is... night trains.
The way to break through as an airline in Australia is to create a lifestyle brand first. Create a points and loyalty scheme first and foremost before buying a jet. This loyalty scheme can be for online shopping, phone plans, credit cards etc. The tangible benefits of the loyalty scheme are discounts on purchases, swag, and other unique non-travel benefits like members only access to “members only” clubs in each major capital where travellers can chill when they’re in a new city. Only once this loyalty scheme is established and you have a proven touch point with the public should you move anywhere near aviation. Then buy up lounge space at airports where your loyalty scheme users can use when they’re flying on your (future) competitors planes. Members only clubs at airports should precede the launch of the airline by some years. Once you’ve build up the lifestyle part of your brand and user experience, then you get your planes leased and only operate the capital routes. All major state capitals only. Then you’re just integrating the travel part of your offering with the lifestyle part of your offering.
Flying the 737-8 is the wrong choice I think - the market is so concentrated that it’s going to be hard to fill even a smallish aircraft like that at first. If they could, I’d think the A220 would be a pretty prime aircraft for this, especially trying for the more Bonza model of trying to find underserved routes. But I guess there probably aren’t many available to lease and the order backlog is probably so long that starting now you wouldn’t have any for years…
Hey Khaled, I've closed the members only area of my channel for the moment I'm afraid. I wasn't producing enough content to warrant the membership fee. If anything ever changes I'll post an update here on the channel. Thanks for showing an interest though.
I think if Rex had concentrated on its regional network and expanding that together with an updated prop fleet, it would have been so much more successful. Trying to compete on mainline routes was a total waste of money and therefore no need for another airline like Koala.
While a certain company is allowed to squat on the slots into the major airport the duopoly continues. No MP is giving up their “lounge access” and free flights for life.
After the demise of Air Vanuatu, we do not have a direct connection between Port Vila and Melbourne and our Sydney connection will be reconnected by JetStar in December. It would be great if Koala Airlines could reconnect us to Melbourne and compete with JetStar on the Sydney route since most of our tourists come from Victoria and New South Wales along with our high number of seasonal workers who travel to Australia to work on farms on those two states.
I wouldn't put Ansett in with the other startups. They were quite successful and had been around since the 1930s. They completely screwed by Air NZ. They went into administration 2 days after the WTC attack in 2001. What a tumultuous time that was!
I concur Ansett operations was Australia wide even into Papua New Guinea. Ansett AN 1936-2002. Great service with quality. Two airline Policy was great with TAA a stable domestic industry. Qantas was only international. Ansett 727.
@@c8Lorraine1 I had many flights with AN from the1970's until 2000. Full service carrier. Superb service. Please expand reasons of your comment and why? Interesting and curious. Ansett 727.
I worked for Air NZ at the time and had some dealings with Ansett which did not reflect well on their competency. I was specifically involved in trying to resolve one of the grounding issues: it was an own goal of almighty proportions.
@@lautoka63 It is all about ownership February 2000 with Air NZ buy it fully at the time. Deregulation of the industry changes in the market place as Ansett was top heavy quality product same as per Pan Am. Deregulation plus miss management of old school airlines have gone Pan Am, Swissair, VARIG, Olympic, TWA to name a few. The industry has changed and needed to adapt and modify to exist still in 2024. Miss Ansett a great airline. Ansett 727.
Ansett was a great success long before Virgin appeared. Mismanagement was its down fall when take overs occurred, if he were alive and in control Reg Ansett would still be in business.
Yes AN was great Sir Reg would be turning in his grave as to know what happened to his airline. Such a loss. I know the history and great flights with AN and subsidiaries. Ansett 727.
Speaking of stock photos: the lady pointing to a board (next to "Building a Brighter Future" on the home page) is in a railway terminal, not an airport. Oooops :)
G,day Stefan from Sydney. I pray your doing well. Really great UK four points of the compass trip with your mate. Do you know how the previous owners " company logo" of the Koala planes? 🌏🇦🇺
What all of these new players should be using embraer aircraft/ smaller jet aircraft that fit around 90 to 100 not the 100 to 140. Its silly to think that they can fill a 737 easily and make it cost effective. The embaer 190 can fly the longer routes and the 175 coulf fly the shorter ones. We just need the aircraft.
What Australia truly needs in terms of aviation is an airline operating from Proserpine's airport who specialises in direct routes between that destination and all the major cities in Australia so that tourism in the Whitsundays can get quality flights instead of being monopolised by horrible Jetstar?
Predatory pricing is terrible in the Australian aviaiton market. Compass and Compass 2 were both agressively priced out of the market by Ansett & Australian Airlines. Virgin probably only survived on the back of the Ansett collapse. Tiger, Bonza & Rex have all hit the same problems.
Australian airlines really need to start focusing on markets underserved by qantas jetstar and virgin, but international routes with decent capacity planes (787) for example, Australians flying to Thailand, are either forced to fly the low cost and undesirable Jetstar or the non Australian Thai airways. One of the things that makes qantas customers so loyal is the “feel like home” approach. Despite Thai airways being a fairly good airline, Australians would naturally shift to the Australian option. But they need a filler. Really, Australian airlines should compete with qantas international rather than Jetstar or virgin. Jetstar is more so chosen when forced to be, and virgin has a very small international network. So the airlines should fly 787’s into large Asia markets where only Jetstar are at the moment. (Kuala Lumpur, Bangkok, Phuket, Hanoi, Ho Chi Min City, Colombo, Mumbai, Manila, Seoul, Nairobi, Taipei, Male, and Hawaii). They would fly these routes from Melbourne, Sydney and Brisbane occasionally, and because Brisbane is a smaller city closer to Asia, they could use A321NEO’s. In my opinion, competing with Jetstar while using a Qantas type approach would be the best bet. To start, prices would have to be relatively low, until they start to earn a strong reputation. And they need some proper advertising, or marketing. They should have a name like If you’ve read to here I respect your patience honestly,
Drop Bear Air.....great. Well good luck to them. I read that they've requested the Government to review the time slots during peak hours for Qantas (and Jetstar) and Virgin to release some peak time slots to enhance to airline competition within Australia which should bring prices down.
Thanks for the video. Just a small note for anyone watching this video and don't know Ansett Airlines. Ansett survived for 66 years, were always a better product than TAA/Australian/Qantas. Far superior service. Unfortunately they ran too many aircraft types, became an expensive business and then once they were bought out by Air New Zealand, Air NZ bled them dry financially. Ansett's business model wasn't great in the end, and it became an expensive airline to run as i mentioned, but i will never forgive Air New Zealand for basically killing Ansett.
I concur yes know history in detail. Two Airline Policy Australia with was stable and watching parallel flights was fun with TN and AN jets take almost who was off the bay first gets to take off first! I liked old Air New Zealand TE days DC8 DC10 international. Great service. Simpler times. Sad with loss of AN great times. Ansett 727
Hmmm, let us see, in the past 30 odd years, there has been Compass, Compass II, Ansett, Impulse, Tiger, OzJet, Bonza, and let us not forget the ailing Rex and the twice reincarnation of Virgin. My gut feeling is Koala will go the way of the Tasmanian Tiger, most likely because they will have the wrong fleet and woeful load factors. Perhaps either Dash 8 Q400 or ATR72's might give them a chance? A novel approach would be to code share with an entrenched carrier, but that would have nil and Buckley's chance of flying... pardon the pun.
There is a long history to learn from here, many have tried and fail. Is the Australia market able to support a 3rd Domestic carrier? Naturally Qantas and Virgin will protect the trunks. Anyway they have announced an intent to start an Airline. We will see.
Any new competitor needs to set up a regional airline using long haul regional jets of 70-80 seat capacity and serve the many routes that do not currently have any service......e.g. Embraer 170/175, build up a reputation over time, same as Qantas and Virgin have and move into being a full competitor when they have a much better customer loyalty and brand recognition base. OR........wait until they are big enough to be brought out by Qantas or Virgin to add to their regional services as Qantas has previously done.
Virgin didn’t have deep pockets at the time Rex launched. Virgin had just come out of administration. Rex assumed Virgin would collapse and took a gamble on that which didn’t pay off.
They have to do things differently and offer a point of difference with some backers with deep pockets. Running leased 737 max's which doesn't have a great reputation ATM could be a mistake straight off the bat. Look at Alliance who turned a profit during covid. Their business model was old school. Own what you have. So you are not paying crippling leasing costs. Virgin started off with one plane. Yes they got lucky with timing. But sometimes that's all you need. Fingers crossed they do well. But running similar battle lines as previously failed attempts, IMO is probably not a strong start ...
Surely their callsign has to be DROPBEAR?
Perfect comment is perfect!
I was thinking Blinky Bill…
Oh hell yes
It fits. Especially with a Boeing.
not sure u want the word drop anywhere in an airline callsign
The key to success, is to fly anti clockwise around Australia, stopping at all 4 points of the compass for epic photo opportunities. :0)
I'm all for that.
Try to do it in a month - given how big Australia is it only makes sense.
I'm predicting it will go down like Bonza did.
I agree, but I hope to god you are wrong.
The old joke, the easiest way to get a million dollars is start with a billion and run an airline.
@@maxrebo8455 Can i steal this joke its very funny
@@Capsicum1 Oh alright.
Bonza made the huge mistake of thinking it could induce demand in regional towns. Had they flown ATR 72s like Citilink or Cebu Pacific do, they might have been able to profit off their regional routes, instead of thinking they could fill the 737 MAX through low fares.
One thing that most people forget are the huge costs in the booking system. Regardless of who they manage to 'host' with, they will be paying a large amount in fees to both the 'host' system AND, the Global Distribution Systems who charge a fee just for booking a seat *see note*, regardless of whether it actually turns into a sale. And then, there are landing fees, etc. These hidden costs are overlooked by the flying public who only see the Fare and who have no idea of where the profit is supposed to come from. In fact, it's a wonder that many airlines even manage to make a profit these days ?
*Note* In my 41 years designing airline systems, one of the many challenges was to try and stop fictitious agents from making thousands of false bookings and just living on the kickbacks they got from the GDS fees !!
I honestly think Rex would have better off to recapitalise their regional fleet with the ATR-42 instead of their foray into the capital city routes.
With previous attempts to start a third major airline failing due to low load factors, would something a bit smaller like the A220 be a more economical answer lower risk platform then the 737?
Who knows what was going through the minds of the board and leadership team?
That risky intercapital move should have been canned as soon as it was clear Virgin would be saved.
Anyone who buys the brand is going to be saddled with a fleet of mostly sad old
Saabs and a half billion dollars of debt that's growing by the day. If I could whip out my crystal ball imagine that it’s going to go into liquidation and National Jet Express and maybe Pel Air will be snapped up. it’ll be then on the governments to scramble to find and appoint alternative providers for some of the routes.
Correct but the start up costs would be way higher than starting with pre-owned 737s. The training of cabin crew and tech crew on a new type costs more when they can just hire staff who have operated 737s before. So long story short, no, opting for an A220 model would be worse
100% agree but i would have stuck with Saab 2000 that would have kept maintenance and re training for flight/cabin crew, engineering costs down, and then with the larger capacity and longer range they could have operated syd/mel or syd/bne
@@mjr320 only 63 Saab 2000’s were built, and they have been out of production for 25 years. You don’t replace an orphan with another orphan.
The ATR-42 is in current production now, and if ordered back when the 737’s were originally leased would have been available relatively soon.
@@stephen_1987 great point, so maybe it might be time for a major fleet upgrade and in that case the ATR is a great option which has multiple size options as well for higher load factor routes, and i dont think if they desperately want to use a jet then the a220 or smaller jet would be all they need
I pray they make it. I’d love to see more competition. Maybe they’re taking their time in an attempt to make it in and continue.
Once Western Sydney airport is open I can see room for a third player in the Australian market. Let’s hope they don’t run out of cash before then though.
australia does not have the flying population for it
@@mjr320 exactly thats what everyone forgets, we only have enough people for 2.5 airlines, which is what we have right now
@@fyshi6226 yes as long as Virgin and Qantas own the rights to airport slots of course they'll only be two. That's how cartels work. Hint: flying population isn't a problem
@Seurnn it is if they can cancel half their flights and not delay anyone significantly there isn't enough people flying, and with the limited slots rex had they could barely get the planes 50% full despite having a frequent and cheap service
@@SeurnnHint: flying population IS a problem. Please don’t run an airline.
We have a long history of startups going broke here in Canada. The most recent failure was Lynx. Our duopoly is Air Canada and WestJet (themselves once a regional startup), plus Porter quietly growing and doing a lot of things right.
See how long this airline lasts, none of the other airlines seem to last long. Fingers crossed 🤞
One of my non-English speaking friends referred to Qantas as "Kangaroo Airlines" when I asked him which airline he took to Australia!
It’s very descriptive.
Foreign pilots often call QF flights "Skippy".
Quite
A
Nice
Trip
Any
Survivors?
@@tedburnard841I mean if Qantas didn’t have an impeccable safety record then I would agree…
@@Tree_132
Queens
And
Nancies
Trained
As
Stewards
My wife and I were looking to travel to Perth and nearly booked on Rex when they announced ADL/PER services. In hindsight, I'm glad we didn't. Their web site offered some quite bizarre routings for Adelaide to Perth, which showed their regional underpinnings. One of the routes we were offered was Adelaide -> Broken Hill -> Sydney -> Melbourne -> Perth. Rex at the time had direct flights between all of those capital cities, so ADL/PER direct was possible. As was ADL/SYD/PER and ADL/MEL/PER, so I have no idea why they wanted us to go to Sydney and Melbourne. Via Broken Hill seems like a unique way to get to Sydney though, might have to try that one day! :)
Not forgetting the demise of Compass v1 and v2
And a raft of others.
And Ansett 😅
if Koala does well, they'll just end up being bought out by Qantas. Remember TAA (Australian Airlines)
I'm so angry they didn't call it Emu air.
Give it a few years, we may have an Emu Air throwing their hat into the ring as well...
All the Americans will be upset - the airline will fold and everyone will joke about the emus losing another war.
(First one wasn't ever a thing BTW)
Bonza has evolved into Emu Air- never could fly.
Sounds like a West Australian airline. EMU EXPORT 😅
@@ACDZ123 that's what we need. Bush Chook Air. Not to be confused with Bin Chicken Airlines.
Wonderfully explained Stef, thank you.
Thanks Bruce
They’ll certainly be cuddlier than qantas
Haha
I loved how you nearly couldn’t get through reading of Bonza’s plane names without laughing
Virgin wasn't originally one of the "big 2". That was Qantas & Ansett, dating back to when Qantas was Government-owned & the 2 Airline policy basically ensured that Ansett didn't even have to compete. It just had to be there. Ansett didn't fail because of market share, it failed because of management neglect & Virgin just happened to be in the right pace at the right time to pick up that much of their market.
Ironically, when Virgin collapsed due to the imact of Covid (& the fact that the half-dozen other airlines that owned it were having their own same problems & had no spare cash to keep it afloat), Rex tried to replicate the same stunt, not only trying to take over Virgin's market but even doing it with Virgin's planes, repainted Rex on the outside but still Virgin on the inside, including the flight crews.
To Rex's horror however, Virgin came back pretty quickly. Bailed up with private equity, Virgin sought to regain it's prior place & Rex was basically stuffed.
Then Bonza comes in with a plane with a not-great reputation which was too expensive to operate for the routes it was servicing. Q400's would have been better. Plus from what I heard it was screwed over by it's foreign owners who weren't paying the leases.
So good luck Koala (not). It sounds tacky & gimmicky, & seems like they're about to make the same mistakes as Rex & Bonza combined! I give them 0 - 6 months.
Compas, Bonza, Rex, East-West, Ansett, Hazelton, Australian, TAA, etc... there is problem here that needsto be sorted.
TAA changed name to Australian Airlines, then became Qantas, as Qantas after Qantas was allowed to operate domestic flights (up to 1990s, only flown international routes).
It looks great Stefan! 😅
Cheers 🥂
Caleb’s Aviation
Compass Airlines, Air Australia, OzJet, Bonza, Rex I've seen them all come and go and chances are Koala Airlines will join this list. The established big players have the industry under their control and they won't allow any new upstarts to rock the boat.
Best of luck Koala. 👍🤞😎
So,hope they fly high and often. When I started flying in 1981 our customer service was A plus, we the crew were the entertainment we spoke to pax had a laugh and more crew on board.
I think it might work well to use Embraer E170s and connect Archerfield (small runway upgrade), Bankstown and Essendon.
I can't speak for Bankstown and Essendon but Archerfield would not be suitable as it doesn't have the infrastructure for passenger jets
Did not realize the max was still flying or could fly in Australia, as it seems to be on the scrappage list for Boeing.
The only aircraft which might work regionally is the A220 xl. Perhaps dynamic pricing was the right pricing model....call it easy jet Australia...after all Norfolk Island is a obvious route. same with northern routes.
Why not start with smaller aircraft such as the a220 or E190s to have less seats to fill
I definitely will use them if they fly to regional towns. I traveled with Bonza numerous times as it suited my needs without going to the capital cities and each time the plane was full.
Another domestic carrier may have a slim chance with Sydney's second airport opening if they can operate from it. The fact Bonza was priced out of Sydney Airport and Rex was already being price gouged to use Sydney Airport was already a big challenge.
You need a Porter Airlines in Australia. I thought Rex would play that role but it obviously didn’t pan out.
You mean pan pan out. 🙃
I'd give them a go as a kickstart!
Also… Air Australia which I think had the coolest livery. Very Aussie.
My understanding was that Bonza's business model was actually successful. The problem was that the company overseas who leased the aircraft to Bonza, we're in financial difficulties and had to take the aircraft back.
IMO their business idea was good but they couldnt run on the important routes (sydney to melbourne and other state capital routes) due to slot hoarding by other airlines and de to this, they were flying large, expensive aircraft (737 Max 8) on routes that simply did not have enough demand to fill said aircraft. Additionally, fierce competition from Qantas and Virgin, who have much more money, were able to undercut airfares on Bonza's routes.
if the government wants more competition in the sector they need to give some legislative support to the smaller guys trying to get in - maybe somehow with slots, terminal facilities, costs for smaller players etc - otherwise the current duopoly seems set to continue to exclude competitors at considerable cost to the travelling public and businesses. If they can legislate against monopolies and break up monopolies then doing a bit to support long term viable competition in the sector should not be asking too much.
imo it's a little bit of both. leasing company blindsiding them combined with lack of profitability. it was evident they were losing money after they began rapidly downsizing their services.
If only Ansett weren’t so reckless and actually hired real finance managers, we’d still have those beautiful tails!
Boomerang would be a great name for an Australian airline.
You could only book return fares though.
😂@@StefanDrury
@@StefanDrury I’ll keep setting them up for you. 😀 Australia is big as is the USA. I think following the model of Southwest Airlines (which copied a lot from PSA, which is a story yet to be told on UA-cam) is the way to go. It’s worked well or extremely well for everyone that’s tried and committed to it. Ryan Air being a stellar example. Australia has about 10% of the US, so the network will never be as vast, but it’s an idea worth considering.
I think the strategy is to come up with something completely unique. Like fly internationally out of regional airports providing regional residents an alternative to having to go to the major cities to fly out of Australia
thats a good idea, but then heaps of regional airports would need to go under massive renovations to accompany for the thousands of extra tourirts and people coming through. also i dont know if most regional airports would have the security standard for international flights.
@@ins3cure207 Canberra Airport does
Cairns has a population of 150k and has flights to New Zealand, PNG, Indonesia, China, Japan and Singapore.
Broome has a population of 14.7k and has flights to Singapore.
@7:23 thanks for giving me the bird mate!!
The airline industry in Australia does seem to favor a duoploy for some reason. If you remember far enough back there was also Compass which tried at least twice and failed both times. I remember when Virgin was the third challenger airline, and there's an argument for their survival being due to the failure of Ansett at the right time leaving Qantas and Virgin as the two remaining, I hope Koala can find a niche and survive. Challenging Qantas and Virgin on price isn't it, ideally it would be something the two incumbents can't or won't do, but I have no idea what that might be.
Anybody who uses the Max will never have me as a customer.
Despite them flying 10's of thousands of hours since the incidents without issue? You could die driving your car to work tomorrow but you dont care about that.
Same, I avoid them.
life is too short as it is to flay a 737 max
Me either
Good overview Stefan.
No mention of Jetstar?
Perhaps use Qantas Group and mention Jetstar.
Why? Well just a piece of the puzzle really. I mean how much effect does the Qantas low cost carrier have on new starters?
Heaps I would think.
Thank you, I kind of lumped Qantas and Jetstar into the same bracket here. Qantas can counter competition at both the corporate and leisure levels, full fare and low price through the two brands. But fair point it’s more the Qantas group not just that particular brand.
@@StefanDrury I am starting to believe that both Qantas and Virgin have the same owners...
@@stjepannikolic5418most airlines in Australia are owned by Qantas.
The only way an airline can take on Qantas and Virgin is to do something *fundamentally different* that they cannot undercut them on, and which is also sustainable in regard to cost and demand. Aside from being a small player doing very niche routes, I truly believe the only solution to this conundrum is... night trains.
agree. something like flying 737's between Moorabbin and Bankstown :)
The way to break through as an airline in Australia is to create a lifestyle brand first. Create a points and loyalty scheme first and foremost before buying a jet. This loyalty scheme can be for online shopping, phone plans, credit cards etc. The tangible benefits of the loyalty scheme are discounts on purchases, swag, and other unique non-travel benefits like members only access to “members only” clubs in each major capital where travellers can chill when they’re in a new city. Only once this loyalty scheme is established and you have a proven touch point with the public should you move anywhere near aviation. Then buy up lounge space at airports where your loyalty scheme users can use when they’re flying on your (future) competitors planes. Members only clubs at airports should precede the launch of the airline by some years. Once you’ve build up the lifestyle part of your brand and user experience, then you get your planes leased and only operate the capital routes. All major state capitals only. Then you’re just integrating the travel part of your offering with the lifestyle part of your offering.
Frequent flyer schemes are usually more valuable than the airline.
Forget the Boeing 737 Death Max Jets !! If they would use the modern Airbus A220 Jets. They might succeed.
Reliability problems plague the a220.
Won't catch me on one
@@ACDZ123 but more to the story that just technical issue (that’s been fixed)
@NoRegertsHere I don't care ..that's it .737 is dead to me
2:52 I wonder how many takes that took given you how you were trying to hold your laughter in😂. Nice new office as well. Its looks soon clean.
Hope they can get up and compete - and that the ACCC watches for Qantas predatory actions if Koala starts getting traction
Flying the 737-8 is the wrong choice I think - the market is so concentrated that it’s going to be hard to fill even a smallish aircraft like that at first. If they could, I’d think the A220 would be a pretty prime aircraft for this, especially trying for the more Bonza model of trying to find underserved routes. But I guess there probably aren’t many available to lease and the order backlog is probably so long that starting now you wouldn’t have any for years…
A220s very unreliable with the PW engines.
Ed Pierson a former senior manager with Boeing on the 737 program said he'd absolutely never fly on a max aircraft.
That's good enough for me.
Hi Stef, I wonder why I can’t join to be member to see your member only videos. Thank you
Hey Khaled, I've closed the members only area of my channel for the moment I'm afraid. I wasn't producing enough content to warrant the membership fee. If anything ever changes I'll post an update here on the channel. Thanks for showing an interest though.
Will wait for it to pop up on Ladbrokes
🐨🦊🐄🤗 the 747 Max ? Same plane that had serious problems? I wont ever fly on that plane. Or Am I wrong about the plane? Thanks!
Sadly you make a good point. The 737 Max 8 brand took a lot of damage as a result of the tragic events in 2018 and 2019.
No issue with the plane, extra AOA sensor been added.
@@NoRegertsHerewho cares. Won't be ever setting foot in one 😅
@@ACDZ123 ok then 🤷🏿♂️
737 max is built by disgruntled low paid American employees who want to to destroy Boeing. So if they miss a few screws, ah well.
Unfortunately they wont succeed but great to see them having a go and wish them well.....
thanks for another upload, for us in Australia tho it is Sunday so it is not quite 2 uploads in a week tho.
I saw some of Bonza's planes on the tarmac at Warsaw, Poland, in June 24. Googled it and it was reported that's where they went initially.
We’re also on the knives edge of a recession - wishing them the best.
Could they be eyeing the Western Sydney Airport base and grabbinga few slots there?
I think if Rex had concentrated on its regional network and expanding that together with an updated prop fleet, it would have been so much more successful. Trying to compete on mainline routes was a total waste of money and therefore no need for another airline like Koala.
While a certain company is allowed to squat on the slots into the major airport the duopoly continues. No MP is giving up their “lounge access” and free flights for life.
Quite the airline specialist
That’s the first I’ve heard of it, but surely The Flying Kangaroo can fly better than a koala!
looks like they are using the same strategy that worked so well for Bonza and Rex
Still cant believe my previous lecturer at EAU is the COO
After the demise of Air Vanuatu, we do not have a direct connection between Port Vila and Melbourne and our Sydney connection will be reconnected by JetStar in December. It would be great if Koala Airlines could reconnect us to Melbourne and compete with JetStar on the Sydney route since most of our tourists come from Victoria and New South Wales along with our high number of seasonal workers who travel to Australia to work on farms on those two states.
I’m not sure I’m a bit Bearish on the stock.
Maybe start of by flying the E195-E2
I wouldn't put Ansett in with the other startups. They were quite successful and had been around since the 1930s. They completely screwed by Air NZ.
They went into administration 2 days after the WTC attack in 2001. What a tumultuous time that was!
I concur Ansett operations was Australia wide even into Papua New Guinea. Ansett AN 1936-2002. Great service with quality. Two airline Policy was great with TAA a stable domestic industry. Qantas was only international.
Ansett 727.
@@ansett7272
I disagree. Ansett was a sh*t airline
@@c8Lorraine1 I had many flights with AN from the1970's until 2000. Full service carrier. Superb service. Please expand reasons of your comment and why?
Interesting and curious.
Ansett 727.
I worked for Air NZ at the time and had some dealings with Ansett which did not reflect well on their competency. I was specifically involved in trying to resolve one of the grounding issues: it was an own goal of almighty proportions.
@@lautoka63 It is all about ownership February 2000 with Air NZ buy it fully at the time. Deregulation of the industry changes in the market place as Ansett was top heavy quality product same as per Pan Am. Deregulation plus miss management of old school airlines have gone Pan Am, Swissair, VARIG, Olympic, TWA to name a few. The industry has changed and needed to adapt and modify to exist still in 2024.
Miss Ansett a great airline.
Ansett 727.
Ansett was a great success long before Virgin appeared.
Mismanagement was its down fall when take overs occurred, if he were alive and in control Reg Ansett would still be in business.
Yes AN was great Sir Reg would be turning in his grave as to know what happened to his airline. Such a loss. I know the history and great flights with AN and subsidiaries.
Ansett 727.
We nee a new full service airline!
I hope they will fly to Tamworth NSW
Should bring back Ansett,, they were the best back in the time
Speaking of stock photos: the lady pointing to a board (next to "Building a Brighter Future" on the home page) is in a railway terminal, not an airport. Oooops :)
G,day Stefan from Sydney.
I pray your doing well. Really great UK four points of the compass trip with your mate.
Do you know how the previous owners " company logo" of the Koala planes?
🌏🇦🇺
If they could do 737 operations from Moorabbin and Bankstown, then they could succeed - which will happen as we all know - n e v e r :)
What all of these new players should be using embraer aircraft/ smaller jet aircraft that fit around 90 to 100 not the 100 to 140. Its silly to think that they can fill a 737 easily and make it cost effective. The embaer 190 can fly the longer routes and the 175 coulf fly the shorter ones. We just need the aircraft.
Yo I was the kid you saw on the train on the Friday a week ago. Yes I am subscribed
Thanks for saying hello, good to meet you.
What Australia truly needs in terms of aviation is an airline operating from Proserpine's airport who specialises in direct routes between that destination and all the major cities in Australia so that tourism in the Whitsundays can get quality flights instead of being monopolised by horrible Jetstar?
Hey Stef thanks for the bird at 7:23 hahaha
Predatory pricing is terrible in the Australian aviaiton market. Compass and Compass 2 were both agressively priced out of the market by Ansett & Australian Airlines. Virgin probably only survived on the back of the Ansett collapse. Tiger, Bonza & Rex have all hit the same problems.
Koala needs to move internationally small cities, to like denpasar, Dili, labuan bajo
A bit like Coles and Woolworths.
Costco, Aldi, IGA are all players that threaten Cole’s and woolies
Bonza version 2 coming soon haha
Australian airlines really need to start focusing on markets underserved by qantas jetstar and virgin, but international routes with decent capacity planes (787) for example, Australians flying to Thailand, are either forced to fly the low cost and undesirable Jetstar or the non Australian Thai airways. One of the things that makes qantas customers so loyal is the “feel like home” approach. Despite Thai airways being a fairly good airline, Australians would naturally shift to the Australian option. But they need a filler. Really, Australian airlines should compete with qantas international rather than Jetstar or virgin. Jetstar is more so chosen when forced to be, and virgin has a very small international network. So the airlines should fly 787’s into large Asia markets where only Jetstar are at the moment. (Kuala Lumpur, Bangkok, Phuket, Hanoi, Ho Chi Min City, Colombo, Mumbai, Manila, Seoul, Nairobi, Taipei, Male, and Hawaii). They would fly these routes from Melbourne, Sydney and Brisbane occasionally, and because Brisbane is a smaller city closer to Asia, they could use A321NEO’s. In my opinion, competing with Jetstar while using a Qantas type approach would be the best bet. To start, prices would have to be relatively low, until they start to earn a strong reputation. And they need some proper advertising, or marketing. They should have a name like
If you’ve read to here I respect your patience honestly,
Bonza 2.0 is not gonna fair well 😭
Drop Bear Air.....great. Well good luck to them. I read that they've requested the Government to review the time slots during peak hours for Qantas (and Jetstar) and Virgin to release some peak time slots to enhance to airline competition within Australia which should bring prices down.
Ha, I wonder how long before Drop Bear Air becomes a thing!
Drop Bair
Honestly if they do MEL-SYD they’re all I’ll fly domestically
Koala Airlines isn't it from Anchorman 2?
Thanks for the video. Just a small note for anyone watching this video and don't know Ansett Airlines. Ansett survived for 66 years, were always a better product than TAA/Australian/Qantas. Far superior service. Unfortunately they ran too many aircraft types, became an expensive business and then once they were bought out by Air New Zealand, Air NZ bled them dry financially. Ansett's business model wasn't great in the end, and it became an expensive airline to run as i mentioned, but i will never forgive Air New Zealand for basically killing Ansett.
I wasn’t upset to see Ansett fail. My baby son a I were treated appallingly by staff. Twice!
@@c8Lorraine1 Sad to hear no details needed.
Ansett 727.
I concur yes know history in detail. Two Airline Policy Australia with was stable and watching parallel flights was fun with TN and AN jets take almost who was off the bay first gets to take off first!
I liked old Air New Zealand TE days DC8 DC10 international. Great service.
Simpler times.
Sad with loss of AN great times.
Ansett 727
Oh god, here we go again. No-one can beat the big players, but I'll break out the popcorn and see how quickly they go insolvent.
Hmmm, let us see, in the past 30 odd years, there has been Compass, Compass II, Ansett, Impulse, Tiger, OzJet, Bonza, and let us not forget the ailing Rex and the twice reincarnation of Virgin. My gut feeling is Koala will go the way of the Tasmanian Tiger, most likely because they will have the wrong fleet and woeful load factors. Perhaps either Dash 8 Q400 or ATR72's might give them a chance? A novel approach would be to code share with an entrenched carrier, but that would have nil and Buckley's chance of flying... pardon the pun.
There is a long history to learn from here, many have tried and fail. Is the Australia market able to support a 3rd Domestic carrier? Naturally Qantas and Virgin will protect the trunks.
Anyway they have announced an intent to start an Airline. We will see.
Any new competitor needs to set up a regional airline using long haul regional jets of 70-80 seat capacity and serve the many routes that do not currently have any service......e.g. Embraer 170/175, build up a reputation over time, same as Qantas and Virgin have and move into being a full competitor when they have a much better customer loyalty and brand recognition base.
OR........wait until they are big enough to be brought out by Qantas or Virgin to add to their regional services as Qantas has previously done.
they could fly more western australia routes
Far better name than Bonza. Also nice livery
They're going the way of Bonza very soon.
Will this go the way of Impulse, Compass, Tiger, Bonza and Rex? I sincerely hope not.
Virgin didn’t have deep pockets at the time Rex launched. Virgin had just come out of administration. Rex assumed Virgin would collapse and took a gamble on that which didn’t pay off.
Rex made mistakes on routes and target market too
They have to do things differently and offer a point of difference with some backers with deep pockets. Running leased 737 max's which doesn't have a great reputation ATM could be a mistake straight off the bat. Look at Alliance who turned a profit during covid. Their business model was old school. Own what you have. So you are not paying crippling leasing costs. Virgin started off with one plane. Yes they got lucky with timing. But sometimes that's all you need.
Fingers crossed they do well. But running similar battle lines as previously failed attempts, IMO is probably not a strong start ...
Maybe they could base in Tasmania which is forgetten the most .
Soon to be called another one bites the dust
If it's better than Qantas, Jetstar and Virgin then it will do well
Wow. I didn't know we had DC3s here in Australia. I seen it on tv flying through the harshest winters
Yeah they look great against the Australian desert as a backdrop hey?
@@StefanDrury sure do
We also had Dokota Airlines flying DC-3 out of Bankstown.
they are hot and noisy and not very pleasant to fly on
Qantas goes to Tamworth well the only planes they send to Tamworth NSW are Turboprop planes
You forgot another airline that tried to take on Qantas and Virgin, that was Tiger
He mentioned them.
Tiger was the low cost subsidiary of Virgin
Australia.