👉 Background: Over the past two decades, the Australian aviation industry has had two major players: Qantas, and its budget carrier, Jetstar…and Virgin. Other players have come in and tried to capture some of the domestic market share, but none of them have lasted.

👉 What happened: This history hasn’t deterred the latest player to enter Australia’s aviation market, Koala Airlines. This company used to be a charter business called Desert-Air Safaris, and it took tourists through Australia, Africa, and Papua New Guinea.

👉 What else: While Koala Airlines currently has no aircrafts, and it's also still waiting to get approval to fly, it claims it has a 'game changing' strategy. It's safe to say it will need this strategy given high barrier to entry.

What's the key learning?

💡Barriers to entry are the costs and challenges that make it tough for new businesses to enter an industry. And the moats that protect incumbents.

💡Industries like banking and aviation have significant barriers, like regulatory requirements and a lot of upfront capital. So unless Koala is able to cop initial losses, the chances of sticking around for the long haul are pretty low.

💡If we look at history, there was Compass, Australia’s first low-cost airline, which was launched in 1990 but was gone by 1991. Then there was Rex, and TigerAir, and of course Bonza, all of which came and went.