A new domestic airline will be launched in Australia early next year offering budget flights.

Bonza Airlines, backed by the US investment firm 777 Partners, will compete with existing carriers Qantas, Jetstar, Virgin and Rex in the domestic aviation market as travel restrictions slowly start to ease.

According to the company, Australia is now the only country out of the world's top 15 domestic aviation markets without an independent low-cost airline.

The closure of Tigerair Australia in 2020, which was a subsidiary of Virgin at the time it stopped flying, left a hole in the budget sector of the market.

Bonza said it will launch in 2022 with a fleet of new Boeing 737-8 aircraft.

Founder and CEO of Bonza, Tim Jordan, told The World Today that the project has been years in the making.

"We are about the leisure traveler.

"It will certainly be fairly unique in Australia for a new entrant to come into the market with brand new aircraft."

'Golden Triangle' not the target

Mr Jordan has been working for discount airlines for 25 years, including Cebu Pacific and Virgin Blue.

Most recently, he was the managing director of FlyArystan, the first low-cost carrier in Central Asia.

He said Bonza will target regional Australia instead of big cities like Sydney, Melbourne and Brisbane where the markets are already competitive.

But some aviation analysts warn that will present a major revenue challenge for the airline.

"An absolute gamble," Neil Hansford, the chairman of Strategic Aviation Solutions, told the ABC.

"And that's a route that I know, prior to COVID, Qantas were operating on Sydney, Melbourne 46 flights a day."

Would the Boeing 737 fit regional airports?

Mr Hansford said he saw another potential barrier: some regional airports may not be able to handle the new planes given their sheer size.

"I'm not aware of enough regional airports as they talk about that will take the [Boeing] 737," he said, adding that their weight was not the biggest problem.

Mr Jordan said so far Bonza has identified 45 Australian airports that are potentially capable of handling the new planes.

"The Boeing operational folks have looked at these airports and given us the thumbs up," he said.

"We're hopeful that we will be flying to a lot of new destinations with what will be relatively large aircraft for the cities and these regions."

Bonza is currently awaiting necessary regulatory approvals before it can take to Australia's skies.