A new start-up airline is planning to launch low-cost flights to leisure and regional destinations across Australia from next year.
Bonza, as the airline has been named, doesn’t plan to compete directly with Qantas, Jetstar, Virgin and Rex on routes with lots of business travellers. Flying a small fleet of new, single-class Boeing 737-8 aircraft (the name new of the Boeing 737 MAX 8), Bonza won’t have fancy lounges or a frequent flyer program. Instead, it will target holidaymakers and “everyday Australians” with cheap flights on underserved routes outside of the major cities.
A few people initially thought it must be April Fool’s Day when they heard the news about Bonza starting up in Australia. But the airline is completely serious. They have the financial backing of 777 Partners, which has also financed Flair Airlines in Canada and the Value Alliance. The airline’s executive team is also highly experienced, with CEO Tim Jordan having previously worked at budget airlines like Virgin Blue, Cebu Pacific and most recently as the managing director of FlyArystan, a successful new low-cost carrier based in Kazakhstan.
Is there room for another budget airline in Australia?
It remains to be seen whether there is a sufficient gap in the Australian domestic market for another low-cost airline.
Bonza’s founders naturally believe there is. They claim that Australia is the only country out of the top 15 domestic aviation markets without two low-cost carriers. This has been the case since Tigerair collapsed last year.
But some industry experts aren’t so sure. Strategic Aviation Solutions chairman Neil Hansford told the ABC that he thought it would be “an absolute gamble”.
Unlike Rex, which has taken on Qantas and Virgin head-on with its new jet services, Bonza will seek to stimulate demand on niche routes that aren’t already being served. The start-up is now seeking partnerships with regional airports across Australia.
Initially, Bonza will only have a few planes. But since it will be targeting leisure travellers who don’t need multiple daily flights on every route, it will only operate most routes a few times per week. This will allow the airline to serve quite a lot of different routes with a small fleet.
It’s quite possible that Bonza is correct, and there are some opportunities to stimulate demand to leisure and regional destinations across Australia that are currently underserved, or are only served by airlines with very high fares. For example, there could be opportunities to launch new low-cost flights to places like Cairns, Uluru, Broome, Alice Springs, Mount Isa, Hamilton Island, Toowoomba, Coffs Harbour or even Tamworth – if the airport is capable of handling Boeing 737s.
This is similar to the business model of Breeze Airways, a new start-up airline in the United States. Breeze’s strategy has been to launch affordable, direct flights on routes that are not currently served by incumbent airlines, such as New Orleans-Oklahoma City and Tampa-Charleston.
But a key difference is that Breeze is operating aircraft like Embraer E190s and Airbus A220s with around half as many seats compared to Bonza, which will have aircraft seating 180-200 passengers.
In that sense, perhaps Bonza’s business model is more similar to that of Ryanair, which also operates Boeing 737s. Europe’s largest low-cost carrier, Ryanair flies to many smaller airports and offers ultra-low base fares while charging extra for pretty much everything.
Bonza is currently in the process of getting regulatory approval and will soon begin talks with Australian airport operators.
Join the discussion on the Australian Frequent Flyer forum: New domestic Aus Airline to launch in 2022… Bonza!