Koala Airlines eyes late 2026 launch to challenge Qantas-Virgin duopoly

Australia’s air travel market, long dominated by Qantas and Virgin Australia, may soon see a new contender in the skies. Koala Airlines, a rebranded version of Desert Air (previously focused on charter and safari flights) is targeting a late 2026 launch, according to CEO Bill Astling.

The announcement comes after a string of failures among would-be competitors. Budget airline Bonza collapsed in April 2024 after a short-lived run that began in January 2023, while Regional Express entered administration after attempting to take on the major players in metro routes.

“We’re not trying to be Qantas or Virgin – our model is fundamentally different, and that’s why we’ve attracted the backing we have,” Astling told The Australian Financial Review.

Astling says the company has kept a low profile not due to delays, but by choice. “We’ve learned from the past – both ours and the industry’s – and we’re taking a disciplined, strategic approach,” he said.

While Koala Airlines hasn’t revealed its route plans, the carrier promises a strategy “fundamentally different” from past failed attempts. The company describes its approach as “more innovative” than the many low-cost entrants that have come and gone over the past 35 years.

On its website, however, the company displays a photo montage of a Boeing 737 MAX 8 with its livery. Koala also states that it is in negotiations to obtain its Air Operator’s Certificate (AOC).

Its entry follows Bonza’s failure, which left employees and creditors unpaid. The low-cost airline struggled to scale its Boeing 737 fleet and never secured critical access to Sydney Airport.

In contrast, Koala aims to build a sustainable operation with a model that avoids head-on collisions with industry giants. Meanwhile, competition remains thin: Qantas’ low-cost arm Jetstar saw its operating margin jump by 13% in the second half of 2024, thanks largely to lack of rivals.

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Ricardo Meier

Creator of the website that started in 1996 as a magazine. He also writes on Brazilian websites AUTOO, MOTOO and MetrôCPTM.

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