Qantas (ASX:QAN) share price falls amid new budget airline competition

If all goes to plan, Jetstar won’t be Australia’s only budget airline for much longer…

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The Qantas Airways Limited (ASX: QAN) share price is in the red today. This comes amid reports a new budget airline is planning to break into Jetstar’s market.

The new airline is intending to launch in Australia early next year, creating the only direct competition to Qantas’ Jetstar.

At the time of writing, the Qantas share price is $5.50, 0.45% lower than its previous close.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.1%, while the All Ordinaries Index (ASX: XAO) has gained 0.03%.

Let’s take a closer look at Jetstar’s potential future competition.

Jetstar might soon face new competition

The Qantas share price is falling amid news Australia might soon have another budget airline.

Newcomer Bonza is planning to launch in the country in early 2022, as long as it can get regulatory approvals.

Bonza will be taking off with a fleet of Boeing 737-8 aircraft, but it hasn’t yet confirmed where it will be flying to. It’s currently in talks with airports around Australia.

Though, in what might be bad news for budget-conscious international travellers, Bonza has no plans to fly overseas. Thus, Jetstar’s Asia-Pacific routes are safe from domestic competition for now.

According to reporting by the Australian Financial Review, the airline start-up is backed by Miami-based investment firm, 777 Partners.

Additionally, Executive Traveller reports Bonza won’t be encroaching on some of Australia’s most popular routes.

Bonza is turning its back on popular routes between Melbourne, Sydney, and Brisbane. Instead, it will focus on less traversed and more leisurely routes, many of which aren’t currently serviced by major airlines.

Additionally, the up-and-coming airline won’t be offering any of the glitz and glam offered by some of its competitors, such as reward systems, airport lounges, or even business class.

Qantas share price snapshot

Today’s news of additional competition for Qantas’ Jetstar likely hasn’t impacted the airline’s share price.

Right now, the airline’s share price is 13% higher than it was at the start of 2021. It has also gained 29% since this time last year.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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