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Is there some good news for Qantas?

After nearly 20 years in the business, Brindabella Airlines is officially grounded. The regional NSW airline company announced today that it is officially suspending all flights as the corporation heads into receivership.

Receiver David Winterbottom noted in a statement: “Given the approaching Christmas and New Year period we will be working very hard to minimise the inconvenience to customers and importantly, enable alternative travel options.” Qantas (ASX: QAN) has stepped up to the plate, providing additional services along Brindabella’s routes. “It’s unfortunate that Brindabella has suspended its operations, however as the national carrier we stand ready to assist the community,” said Qantas CEO Alan Joyce in a statement on Saturday. Joyce added that customers currently holding Brindabella tickets will be eligible for discounted Qantas rates.

The now-defunct airline operated up to 250 sectors a week, with regional flights headed out from Canberra, Sydney, and Brisbane hubs.

Foolish takeaway

With Brindabella Airlines out, there’s more open demand on the market. According to the Sydney Morning Herald, Brindabella even had regulatory approval with the NSW government to operate as the sole airline provider for flights between Sydney and Mudgee, Cobar, Narrabri, and Moree, plus winter flights to Cooma.

While Qantas is starting to stake claims, other airlines like Regional Express (ASX: REX) and Virgin Australia Holdings (ASX: VAH) could be quick to land with their own offerings. Brindabella’s niche is a small one, but the scale of other airlines could make this new market more profitable than the previous provider found it. NSW government approval will ultimately play a large role in determining the winners and losers of this new slice of the market. While the jury’s currently out, a $30 million tourism deal between Qantas and the NSW government announced in April could give Qantas an extra edge in any opportunities. Airline investors will need to keep a close watch on this developing case over the next few weeks – be sure to check back in with The Motley Fool for the latest news on Brindabella’s replacement.

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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

 

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