New budget airline Bonza aims to fill the gap in Australia’s routes | The aviation industry

A new domestic low-cost domestic airline, Bonza, hopes to add to the boom after the lockdown in flights with a range of services to destinations currently neglected by existing airlines.

Bonza has announced its plan to enter the Australian domestic aviation market and begin flights in early 2022, and industry analysts believe the airline’s goal of taking budget-conscious passengers to tourist destinations would fill a gap in the market — if the airline receives regulatory approval.

On Tuesday, Bonza’s CEO, Tim Jordan, sent expressions of interest to 46 airports across all states and territories, seeking “regions and cities to step forward as part of our first route network.”

Jordan, an experienced aviation figure and former director with Virgin Blue, told Guardian Australia that Bonza would aim to compete with the low fares sold by e.g. EasyJet and RyanAir at short distances in Europe.

He compared his plan for Bonza to the model of the British airline Jet 2, which he said had been successful in competing with EasyJet and RyanAir for price, but mostly focused on leisure destinations rather than frequent services between capitals – something he would emulate in Australia.

“Our product will not appeal to business travelers – there will be no more frequencies a day for you to choose from for those returning later in the day,” he said. “There will be more than three or four frequencies on a route per week.

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“This allows us to fly routes where there is currently no non-stop service between the two points … We do not steal traffic from other airlines, we want to increase the demand for domestic travel. More than half of the markets we are going to operate in, no other airlines currently fly. ”

Australia’s aviation landscape has changed during the pandemic, with the departure of low-cost carrier Tiger after its parent company Virgin underwent an administration process and even moved towards the lower end of the market and the expansion of Rex to fly further routes to the capital.

Government support was also introduced and expanded under Delta lockdowns to keep skilled workers employed and ensure that airlines were ready to resume flights once border restrictions were lifted.

Tom Youl, a senior industry analyst at IBISWorld, said the result of carrier upheaval during the pandemic and the first reopening of domestic borders earlier this year had resulted in reduced prices to stimulate travel for Australians eager to travel.

Youl said he did not think “legislative approval of Bonza is necessarily a given” and he expected “Qantas and Virgin would fight hard”.

“I would be surprised if they did not fight.”

Youl expected, however, that if Bonza entered the market, its business model would be successful because “leisure destinations are the logical hole in the market”.

“I expect that they will try to compete with Jetstar for price-conscious people who do not want bells and whistles who just want the seat. There is definitely room in the market for this. ”

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Youl noted that Tiger had been successful when it entered the market independently in 2007, before being fully acquired by Virgin Australia in 2015.

Jordan seemed untouched by the turbulent history of independent airlines seeking to enter the Australian market in recent decades.

“This is something new for Australia, but it is not new for the rest of the world,” he said, noting that Australia was among the top 10 domestic airlines in the world that did not have an independent low-cost carrier.

Bonza plans to use Boeing 737-8 aircraft and is backed by US private investment firm 777 Partners, which funds several budget carriers around the world, including in Canada and Asia.

Jordan was convinced that given 777 Partners’ history supporting aviation projects, Bonza’s financiers were “in it for the long term” and would see any difficulties when the airline took off.

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