The Qantas Airways Limited (ASX: QAN) share price is trading 1.3% lower this morning. Today's slip follows a reveal from the airline's soon-to-be newest competitor Bonza.
Although the latest Australian airline entrant will be targeting the budget market, investors might be wary of the dent it could put in Qantas' own budget offering Jetstar.
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Taking a different path, literally
Investors have gone cold on the Qantas share price in Tuesday morning trading. Coincidentally, this aligns with Australia's latest addition to the airline industry revealing its routes and destinations.
According to reports, the ultra-low-cost competitor is planning to take to the skies across 25 different routes. These will service 16 locations across the eastern states of Australia.
Roughly 80% of Bonza's proposed routes are currently not being served by an airline. This means, unlike its ASX-listed peers, Bonza Airlines will be operating mostly in completely new markets.
Bonza chief executive Tim Jordan highlighted the unique proposition, stating:
That's delivering something very different to the market. Eighty percent of the routes are not flown by any other airline at this point. It's new ground for Australia.
It seems the differentiation isn't enough to ease the minds of Qantas shareholders as the share price slides this morning.
Destinations across Bonza's planned network include:
- Melbourne
- Mildura
- Albury
- Coffs Harbour
- Toowoomba
- Mackay
- Townsville
Meanwhile, Aussies can expect to take flight at enticing price points. For example, a flight between the Sunshine Coast to Rockhampton would cost about $50 one way. Longer one-way flights, Melbourne to Sunshine Coast, are likely to set travellers back between $75 to $100.
What's been playing on the Qantas share price?
A new addition to the domestic airline market has yet to push the Qantas share price into the negative so far in 2022.
Perhaps Qantas investors are optimistic about the fast-approaching international border reopening. The loss of international travel has remained a heavy burden for Qantas over the last two years.
In a December update, the airline operator shared its expectation for international capacity to be approximately 30% of pre-COVID levels in the third quarter.
The Qantas share price is up 14% in the last 12 months.
