The Regional Express Holdings Ltd (ASX: REX) share price descended today amid reports new competition for the regional airline will soon be taking off.
There's a new kid ready to move onto Australia's budget airline block and its name is Bonza. Bonza is expecting to launch early next year and will be focusing on routes that sound very similar to REX's offerings.
As of Tuesday's close, the REX share price was $1.58, 2.17% lower than its previous close.
That's a slightly worse performance than the broader market's today. The S&P/ASX 200 Index (ASX: XJO) dropped around 0.2% on Tuesday. Meanwhile, the All Ordinaries Index (ASX: XAO) fell 0.3%.
However, REX's dip was in line with that of its peers. The Qantas Airways Limited (ASX: QAN) share price fell 1% while Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) dropped 1.3% and 2.4% respectively.
Let's take a closer look at the regional airline's potential new competition.
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REX might soon face new competition
The REX share price plunged lower today amid news Australia is set to get a new domestic airline.
Bonza is set to be Australia's second budget airline after Qantas' Jetstar. Though, its launch is still subject to regulatory approvals.
Like REX, the airline won't be offering any international flights. Although, exactly where it will be flying remains a mystery. Bonza is currently in talks with airports around the country to finalise its offered routes.
And, according to reporting in Executive Traveller, the airline will be avoiding the country's most popular flight paths.
Unlike most airlines, routes between Melbourne, Sydney, and Brisbane won't be a focus of the airline. Instead, Bonza will reportedly be encroaching on REX's turf, offering flights to "regional leisure destinations".
Additionally, the publication states Bonza will be scrapping the luxuries of travel to focus on travellers seeking domestic holidays rather than the business travel market.
Bonza customers won't have access to airport lounges, reward systems, or business class.
The new airline's customers will be flying on Boeing 737-8 jets that can each seat 186 passengers. That's 10 more seats than on REX's largest plane.
REX share price snapshot
It's hard to say whether news of Bonza's planned launch affected the REX share price today. It's been struggling on the ASX lately.
REX's stock has fallen 24% since the start of 2021. However, it's trading for 13% more than it was this time last year.
