‘Qantas and Virgin are not going to sit back and watch somebody eat their lunch’: Why Bonza failed to take off
Budget carrier Bonza went into voluntary administration this week, although it seemed anything but voluntary as planes were being repossessed from tarmacs and passengers of an airline that no longer existed were stranded at various places across the regions.
As international aviation consultant, Neil Hansford, told the Fear & Greed podcast on Wednesday morning, Bonza’s crash comes as no surprise.
“The business model was unlikely to work in Australia,” he stated bluntly, pointing to start-up costs, coupled with the “problem of trying to provide an all- leisure airline on routes that are fundamentally too thin, with an aircraft that was 180 seats” – and a new aircraft at that.
“It’s a very thin market”, Hansford said.
“Very few airlines when they’ve started in the low cost area, have started with brand new aircraft with a reputational problem that the 737- 8 had, in a market where Qantas and Virgin are not going to sit back and watch somebody eat their lunch.
“So it was always difficult, but the particular routes and I said it before it ever started, these routes are not going to give you enough traffic. They didn’t understand the basic rules that unless you’re getting business market and getting proper yields of people who will pay the right fare, you’ll have your back to the wall and you can fill an aircraft like this to 180 seats. But if it’s all at the wrong fare, you will go nowhere but down.”
Hansford said Bonza’s failure also shows there isn’t room for another airline in Australia.
“Because of our population and the spread of our population, we don’t have enough people to have four or five airlines,” he said.
“And whilst ever we as Australians require the service levels, we’re not very forgiving. We want the world, we want to pay nothing for it. And no matter how well Virgin and Qantas are going at the moment, this can only be expected to continue. And if there is a route that’s not being serviced, there’s no way in the world that people like Steph Tully at Jetstar won’t be looking to how they put the right equipment on that route.
“And that’s why Qantas have got their relationships with people like Alliance. They operate turboprops. They can match the market with the right size aircraft.”
Richard Albarran, Kathleen Vouris and Cameron Shaw of Hall Chadwick were appointed administrators of Bonza on Tuesday, with the group saying in a statement given to Mumbrella: “The voluntary administrators with the engagement of Norton Rose Fulbright are currently considering the continued trading of the company’s operations during the course of the administration period including the continuation of employment of all employees of the company.”
The administrators also confirmed they have “commenced engagement with all key stakeholders” and hope to provide regular updates.
Listen to the entire interview here.
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Nathan Jolly is the Deputy Editor of Mumbrella. He joined the team in July, 2023.
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There goes my holiday to Nar Nar Goon 🙁
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Nathan has got it right,It was set to fail in the first place.Q&V would of squalled those routes along time ago if they were viable to service.
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