New budget airline Bonza aims to fill gap in Australia routes

Bonza, a new domestic ultra-low-cost airline, hopes to increase the post-lockdown boom by offering a host of services to destinations that are currently overlooked by other airlines.
Bonza has made public its intention to enter Australia's domestic airline market. The airline will begin flights in early 2022. Industry analysts believe that Bonza's target of taking budget-conscious tourists to tourist destinations would be a filler for the gap in the market, if it is granted regulatory approval.

Tim Jordan, Bonzas' chief executive, sent out expressions to interest on Tuesday to 46 airports in all 50 states and territories. He was looking for cities and regions to join our initial route network.

Jordan, an experienced aviation figure who was previously with Virgin Blue, stated to Guardian Australia that Bonza would try to match the low ticket prices of RyanAir and EasyJet on short-haul European routes.

He compared his Bonza plan to the British carrier Jet 2 which, he stated, had competed with RyanAir and EasyJet on price. However, it was more focused on leisure destinations than on frequent services between capital cities. This is something he would replicate in Australia.

The product won't appeal to business travelers. There won't be multiple frequencies per day for those who need to travel later in the day. There will only be three to four frequencies per route per week.

This allows us the freedom to fly non-stop routes between two points. We won't steal traffic from other airlines. However, we will be increasing domestic travel demand. No other airline currently operates in more than half the markets that we will be operating.

Australia's aviation landscape has changed significantly over the course the pandemic. With the departure of Tiger, a low-cost carrier, after Virgin went through administration, the carrier was repositioned towards the lower market and the expansion by Rex to fly to major capital cities.

Government support was also extended during Delta lockdowns in order to keep skilled workers at work and to ensure that airlines could resume flying once border restrictions were lifted.

Tom Youl, IBISWorld's senior industry analyst, stated that the combination of the carrier upheaval and the opening of the domestic borders earlier in the year resulted in lower prices to encourage travel to Australians.

Youl stated that he didn't believe Bonza would be approved by regulatory authorities and that he expected Virgin and Qantas to campaign hard.

It would be surprising if they didn't fight back.

Youl believed that Bonza would succeed if it entered the market because of the gap between leisure destinations and the market.

They will likely compete with Jetstar in price for those who aren't looking for all the bells and whistles but just want the seat. This is a market that has plenty of space.

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Youl pointed out that Tiger was successful in entering the market in its own right in 2007, before Virgin Australia fully bought it in 2015.

Jordan was not bothered by the turbulent past of independent airlines trying to enter the Australian market in recent years.

This is a new concept for Australia, but it's not new for the rest. He said that Australia was one of the top 10 international aviation markets without a low-cost carrier.

Bonza will use Boeing 737-8 aircraft. Bonza is backed US private investment firm 777 Partners. 777 Partners funds many budget carriers worldwide, including those in Canada and Asia.

Jordan believed that Bonzas financiers would be in the business for the long-term, given the history of 777 Partners backing aviation projects. This was a confidence Jordan had.