Western Sydney International Airport (WSI) could be home to a new ultra-low-cost airline under plans by a former Ansett and Qantas executive.
Zinc Airlines, a project by Peter Kelly, who ran Ansett’s Golden Wing Club and Qantas Frequent Flyer and helped set up Jetstar before moving into aviation consulting, is seeking to raise $200 million for what is described as a Ryanair-inspired business model.
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According to Kelly, Zinc would initially fly between Sydney, Melbourne and Brisbane before potentially expanding to the Gold Coast, with a fleet of Airbus A321neo aircraft only, with fares cheaper than Jetstar.
The airline would launch within 17 months of raising financing: $100 million from investors and $100 million in debt.
“One of the main characteristics of an ultra-low-cost airline model is its efficiency. Some think it is about not paying staff and having low costs; it is not. Our model is to exploit the assets and operate the planes for a minimum of 12 hours a day,” he said. he told the Australian Financial Review.
“Jetstar is operating a larger model with the number of places they fly; the type of network they have, with a large number of planes and places, they can’t apply the same model.”
In your websiteZinc says Kelly has watched the failures of the domestic aircraft operations of Compass, Impulse, Tiger Airways, Bonza and Rex, calling each of them “predictable.”
“The business models were flawed from the beginning, and [Kelly] “I could articulate exactly why, long before the market gave its verdict,” the website says.
“SYD structural space and gateway limitations. Structural cost disadvantage. Undercapitalization. The wrong plane. The wrong routes. The wrong time. He knows exactly why they failed. Zinc has been designed so that none of those reasons apply.”
According to Zinc, the opportunity provided by the opening of WSI later this year “ends a decades-long limitation” for new market entrants.
“A single congested, curfew-ridden, slot-restricted airport in Sydney made it functionally impossible for a new entrant to build a genuinely competitive cost base. Incumbents were protected not by superior management but by a shortage of infrastructure,” the website says.
“For the first time, a new national airline can enter the Sydney market without the limitations that have defined – and defeated – all previous rivals. Zinc has been designed specifically for this moment. It would not exist without it.”
Kelly told the AFR that the major national airlines “would try to make life difficult” for Zinc, but would have to act carefully to avoid being “guilty of predatory pricing.”
“Operating from western Sydney also makes it harder for them because they have to bring capacity from somewhere to do it and potentially lose slots in Sydney – they’re going to be robbing Peter to pay Paul, so to speak,” he said.
Another new airline, Bill Astling’s Koala Airlines, could launch this year and, according to Astling, has already secured leases for three 737 MAX 8 aircraft.
