KOALA AIRLINES: Beaten before it even starts?

Koala Airlines promised to be a disruptor and to take on Qantas, Jetstar and Virgin Australia on Australian domestic routes. Today (2:15 pm AEST, 22 January 2025) it faces winding up proceedings. Wealth Creation Pty Ltd brings the action in the Victorian Supreme Court. It looks like Koala Airlines might be finished before it even starts.

Down and out before it got started

The Airline has not even started flying. But unless it wins this action, it could be removed from the Australian Register of Active Companies. To avoid that fate, it would need to settle with the petitioner or prove to the court that it has sufficient funds to settle the debt and continue to trade.

The action commenced almost a month ago, in December 2024, so Koala has already had a month to sort the matter out. Admittedly, that period was over the Christmas period, when getting lawyers and courts to focus when they are likely to be on holiday may be a challenge.

Background

Koala Airlines had promised to be a disruptor. It promised to take on the majors just as Bonza Airlines and Regional Express (REX) Airlines had done. Both of those airlines faced dramatic financing and board challenges.

The press was somewhat sceptical of the company’s promises of innovative tech, leased Boeing 737s, and taking on Qantas and Virgin. That is, if they were reported at all.

Just before the pandemic in 2019, Koala acquired Desert Air Safaris, an air touring company that had been started in the 1970s. It launched itself in 2024 just as Bonza was collapsing, with a promise to start operations in 2025.

Bill Astling the company CEO based in Melbourne, recognised that Koala faced challenges:

“I’ve had a few people who’ve said: ‘Have you appointed the liquidator yet?'” .

Bill Astling in an interview with the ABC for 4 Corners

Bill Astliing has a long history with aviation, including the failed cargo carrier Air Express in 1977. As a sidebar, he was associated with a company that planned to run weekly cargo flights using a Russian-built Antonov 124 between Australia and Europe at the height of Perestroika in 1990.

He has been cagey about how Koala will succeed and the strategy to be used. He has outlined a refund policy, that sounds unique. Fare purchase funds would sit in a trust account until the flight is taken, and if not would be returned to purchasers.

2PAXfly Takeout

Some quarters have regarded Koala’s plans as a bit of a joke. For instance, the main financial paper in Australia, the AFR, has not covered them at all. Their strategy has been rather opaque. We don’t know what would shield them from the competitive failures of other Airlines chalenging Qantas Group and Virgin Australia.

We will soon know if they will sink before they even start. The disease that seems to afflict all Australian airline competitors is inadequate financing.

I’ll update this post once there is a published outcome of the action in the Supreme Court of Victoria.