Eye Local Market

By the Editorial Team · Thursday, July 2, 2026

Airport Coordination Limited and an unnamed airline, reportedly VietJet, must decide by August 31 whether to use or return allocated aircraft slots, with VietJet planning to start operations with fewer than five planes on routes between Sydney, Melbourne, and Brisbane. VietJet's entry is expected to trigger price competition with Jetstar, challenging smaller domestic start-ups like Koala Airlines and Zinc Airlines as they seek regulatory approval and financement to launch services in a potentially volatile market.

Airport Coordination Limited and a yet-to-be-named airline have until August 31 to decide whether to utilise allocated aircraft slots or return them. VietJet is reportedly planning to operate fewer than five aircraft initially, serving routes between Sydney, Melbourne, and Brisbane. The carrier is expected to offer competitive fares that could instigate a price competition with Jetstar, the budget subsidiary of Qantas.

This development poses challenges for domestic start-ups Koala Airlines and Zinc Airlines, both of which have yet to apply for an Air Operator’s Certificate (AOC) or secure aircraft. Bill Astling, founder of Koala Airlines, expressed skepticism about the market’s capacity, stating that it could not sustain three new entrants. Despite this, he remains optimistic that Koala Airlines will commence operations by mid-2027.

On the other hand, Zinc Airlines founder Peter Kelly has outlined a strategy focused on becoming the price leader in the domestic market. Zinc aims to operate flights from Western Sydney Airport to Melbourne, Brisbane, Adelaide, and the Gold Coast. Kelly is currently working on a $230 million capital raising initiative, targeting an operational launch in early 2028. While acknowledging the challenges ahead, he remains undeterred by the potential entry of three new airlines, emphasizing Zinc’s anticipated low-cost base as a key competitive advantage.

The prospect of VietJet entering the Australian domestic market with aggressive pricing could intensify competition, potentially affecting the growth trajectories of emerging domestic airlines. Industry observers note that fare wars may benefit consumers through lower prices but could put pressure on smaller carriers attempting to establish a foothold. As new entrants prepare to navigate regulatory approvals and market dynamics, the coming months will be critical in determining the landscape of Australia’s domestic aviation sector.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.