Exclusive: Yes, we have planes, says Koala Airlines CEO

Speaking exclusively to Australian Aviation, Astling said the planes are likely to be built in around July or August next year, with the launch date for the airline depending on their delivery.

“We’ve got the first three, and then we’ve obviously got to get the next batch, and the next batch after that, which we’re working on at the moment, so it’s a progressive thing,” he said.

“Starting this operation is not easy, particularly when you look at the global problem with supply of aircraft, and you’re up against people like Ryanair who are screaming for aeroplanes, and many other major companies who would go well ahead of us.

“So, we’ve been fortunate to get these first three, and we’re working on additional aircraft at the moment.

“Three’s a good number, but we want to follow up fairly quickly after that to get another two or three. We’ve obviously got not only to be viable, but we’ve got to be able to develop the routes where the demand is.”

According to Astling, while Koala will focus on tourists and leisure travellers over the corporate market, it will not pursue a model of point-to-point travel as Bonza did, looking instead to carve out its own niche on major city and holiday destination routes including the “Golden Triangle” of Sydney-Melbourne-Brisbane.

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“We’re going where the demand is – it’s not going to be a Bonza thing. We’ve had a couple of Bonza airports approach us, and we’re looking at that,” he said.

“Essentially, we’re focusing more on tourists and on the tourism industry, rather than any business class or any sort of corporate deals.

“We’ve got an idea of where we’re going to operate, but we’re a year and a bit away from starting, at least 15 months away from starting. So, these things will change in the next six months, probably.”

Astling also said that Koala will not be aiming to compete with the major airlines on price, as several failed carriers have in recent years, pointing to the example of Rex last year attempting to undercut on flights from Melbourne to Perth only to itself be undercut by Virgin.

“We’ve had about 10 or 12 [airlines] that have started, but the real reason they started was because they all wanted to undercut the two domestics, the two majors. That’s how the CEOs of those companies portrayed it to the public: ‘we’re here to provide cheaper fares’,” he said.

“These are the areas that we are aware of, and it’ll happen to us, so we’ve got to plan how we deal with that, and how we master the battle that we’ll have in certain areas. We know nobody’s going to stand by and just watch Koala grow in the way that it should do.

“Price is obviously the main criteria people have in in selecting a sector, but there’ll be other things that we’ll be doing which will attract the passenger.

“We’re not going to set up a website with $100 fares between Melbourne and Sydney, or Sydney and Brisbane. There are other ways to do it, and that’s what we’re working on.”

One strategy Astling has flagged is serving as a feeder airline for foreign tourists, including from China, to see more of Australia, and he said Koala has seen “quite a lot of interest from foreign airlines” in this regard.

“Of all the tourists that came in from China – and at one stage, we were bringing in 1.8 million a year – 80 per cent that came into Sydney, Melbourne, Brisbane, never went anywhere else,” he said.

“They stayed for seven to 10 days, and that was it. They didn’t see much of Australia. Most of them just saw the city they came into.

“Part of the reason was, it was difficult for them to master the websites of the airlines, and the tour operators didn’t really operate inclusive tours at that stage of time. I mean, they did, but not to the extent that they’re going to operate in the future.

“So, there’s a lot more people that will come in next year and in years hence, that will come in on more inclusive tours, rather than just coming in and visiting one city.”

Astling also acknowledged a degree of scepticism in the market, given the number of airlines that have collapsed in the past few decades, as another hurdle for Koala to overcome.

“There’s a bad taste in people’s mouths about Rex and Bonza. Bonza walked away with a massive amount of debt – they lost $170 million in in two years, which is astronomical,” he said.

“Rex has probably cost an investor well over $100 million, probably close to $150 [million], so when you total up all the airlines that have failed in Australia since deregulation, probably an amount of money that’s been lost wouldn’t be far short of a billion dollars.

“I can sit people down and tell them why we will be successful, but the sceptics have just seen a whole litany of collapsed airlines, and they think ‘here comes another one’.

“We’re not going to be a low fare carrier – we’re trying to have a balanced and sustainable approach, and have a solid foundation before we start. We don’t want to use other people’s money to build our business.”

Koala Airlines holds the AOC CASA.AOC.0317, which it inherited when it purchased Desert Air Safaris in 2019, as confirmed by Australian Aviation with both Astling and CASA.

The company earlier this year fended off a winding-up application by a shareholder, Wealth Creation.