Zinc Aviation, founded by former Qantas executive Peter Kelly, aims to become Australia's first independent ultra-low cost carrier, modelling itself on Irish budget airline Ryanair with flights anchored at Western Sydney International Airport. The airline is seeking approximately $140 million to get off the ground, hoping to shake up the notoriously tough Australian aviation market.
Blueprint for Success
Kelly claims to have the winning formula to sidestep the pitfalls that have brought other Australian airlines to their knees. He reportedly intends to model the venture on Ryanair, according to the Financial Review. Zinc's strategy will centre on "sweating the assets and running the planes for 12 hours a day minimum". The airline's website bills itself as "Australia's first independent ultra low cost carrier" and states: "Zinc is being established to exploit a once-in-a-generation structural shift in Australian domestic aviation - the opening of Western Sydney International Airport."
Learning from Past Failures
Australia has a lengthy track record of failed aviation ventures, with carriers such as Compass, Impulse and Bonza all having ceased operations. The website notes: "Zinc's founder has watched every one of them. Each failure was predictable. The business models were flawed from inception - and he could articulate exactly why, long before the market rendered its verdict." It adds: "Structural slot and gate constraints of SYD. Structural cost disadvantage. Undercapitalisation. The wrong aircraft. The wrong routes. The wrong moment. He knows precisely why they failed. Zinc has been engineered so that none of those reasons apply."
Operational Model
The carrier claims that for the first time, a fresh domestic airline will gain access to the Sydney market without the limitations that have hampered every previous rival. The airline will run a single fleet type - the Airbus A321neo - and comprise a targeted network of high-frequency trunk routes based at WSI, Melbourne, Adelaide and Brisbane. A "novel base-assigned operating model, unprecedented in the Australian context, keeps aircraft productive, crew costs lean, and overnight complexity eliminated. The model is stress-tested," the website read.
Funding and Challenges
According to the Financial Review, Kelly is working to obtain financing to cover aircraft deposits and support its operations. However, the airline is launching at an extraordinary moment for worldwide fuel prices. The Middle East conflict has pushed up international oil prices and presents a risk to jet fuel expenses, which could be transferred to passengers.
