Can a new airline survive Australia's industry duopoly?

Australia has a disturbingly long list of passenger airlines that have failed.

Ansett Australia, which lasted from 1936 to 2002, is probably the highest-profile casualty in a landscape dominated by Qantas, but others include include Bonza, Australian Airlines, Compass Airlines, Impulse, O'Connor, TigerAir, OzJet, Rebel, and dozens of others which came and went with most flyers barely noticing.

Some went bankrupt, others were swallowed up by competitors.

Then there were Hazelton and Kendell, which merged to become Rex (Regional Express).

Now there is a newcomer in this wildly competitive market - Koala Airlines, whose CEO Bill Astling predicts will be a serious competitor to Qantas and Virgin Australia.

Astling has told local media that Koala Airlines is targeting late 2026 for its debut flights, despite it not having any aircraft or an air operator’s certificate.

Koala has said it will use narrow-body, twin engine planes to service a combination of popular and niche domestic routes.

“We’ve deliberately kept a low profile - not because we’re stalling, but because we’re building something with a long-term, sustainable foundation,” Astling told the Australian Financial Review.

Koala's website (yes, they have a website) says: "Koala’s strategy will fundamentally differ from previous entrants in a domestic market which has been long dominated by two major airlines since the Australian government first introduced the Two Airline Policy in 1952.

"Under this protectionist policy, only two airlines were allowed to operate flights between state capital cities and between capitals and nominated regional centres. It was not until 1990 that the government relaxed the policy to allow competition in the market.

"While many new low-cost carriers have entered the market since 1990 and focused solely on offering cheaper fares, almost entirely leading to unsustainable competition, Koala is taking a more innovative route.

"While many new low-cost carriers have entered the market since 1990 and focused solely on offering cheaper fares, almost entirely leading to unsustainable competition, Koala is taking a more innovative route.

"Our goal is to carve out a unique niche that enhances the industry landscape without disrupting existing standards by creating a lasting impact on the industry."

We shall see.