Bonza Airline Discussion

[Chicken]

ACCC issues warning against QF and VA:

Warning for Qantas and Virgin about flights

The boss of the Australia’s competition watchdog has warned Qantas and Virgin that they will be watched “very carefully” to make sure they don’t block two new airlines entering the market.

www.news.com.au

Can ACCC block their budgie sumgglers and their high cut bikini line uniforms?

 

[Saab34]

Oil did jump the $100 mark in the last hour or so so it’s definitely in danger period for airlines.

Nobody let alone a new low cost entrant are not really at the position to ‘raise prices’ as such at the moment either.

 

[AIRwin]

Sky at MCY today has cleared for Bonza?

 

[HS-TQE]

AFR Paywall article reporting that co-founder and former Virgin Blue/Airnorth CoO Peter McInally has departed the company. No reasons given.

 

[henrus]

AFR Paywall article reporting that co-founder and former Virgin Blue/Airnorth CoO Peter McInally has departed the company. No reasons given.

It's a very small article on page 37 of today's AFR.

They do note that this actually occurred late last month (only just being picked up now), meaning he was at the airline for 7 months. The "speculation" is that this might slow down the process of geting the AOC

The Newcastle airport website is still saying flights from mid 2022 (subject to reg approval) and tickets on sale from mid April.

 

[FishFood]

I'm definitely interested to give them a go, though I will have to fly another carrier to get there from WA. I might fly Mildura to MCY, and pick up some budgies on the flight

 

[AIRwin]

I might fly Mildura to MCY, and pick up some budgies on the flight

The budgies may come in handy so that you (or your parts) don't become FishFood... Bonza!

 

[jakeseven7]

AFR Paywall article reporting that co-founder and former Virgin Blue/Airnorth CoO Peter McInally has departed the company. No reasons given.

Well thats big news.....

Hmmmmmm

 

[Saab34]

Well thats big news.....

Hmmmmmm

COO is responsible for the AOC right?

I somewhat think this might delay getting approval somewhat. CASA will be asking questions. They likes asking a million questions. When problems arise during these sort of processes, they can draaaaaaaag on.

 

[jakeseven7]

COO is responsible for the AOC right?

I somewhat think this might delay getting approval somewhat. CASA will be asking questions. They likes asking a million questions. When problems arise during these sort of processes, they can draaaaaaaag on.

Our AFF insider pauly7 said in here there was no way they would be up flying Q1 and unlikely Q2. Seems to be materialsing....

 

[Revenge]

Jayne Hrdlicka doesn't seem to think Bonza are onto a winner (unsurprising to see her saying that).

Virgin boss sceptical of Bonza’s business model

Virgin Australia CEO Jayne Hrdlicka has shared her concerns about upcoming startup carrier Bonza’s business strategy, arguing that the low-cost, low-frequency leisure travel model that functions overseas may not translate in Australia.

australianaviation.com.au

 

[henrus]

Jayne Hrdlicka doesn't seem to think Bonza are onto a winner (unsurprising to see her saying that).

Bonza was suggesting fares from $50 at launch. Don't get me wrong those prices are great but compared to the other low cost examples like Ryanair it isn't cheap enough and that's now VA, QF and ZL who've said they don't think Bonza will work.

Ryanair can make it work by charging $10-20 (sometimes less) and attracting people to these "regional" airports but with Jetstar not much more expensive operating to/from the major airports they're going to need to get the price down to convince people to travel to their destinations instead.

 

[dajop]

Ryanair can make it work by charging $10-20 (sometimes less) and attracting people to these "regional" airports but with Jetstar not much more expensive operating to/from the major airports they're going to need to get the price down to convince people to travel to their destinations instead.

Of course Ryanair make a chunk of their money from ancilliary fares - like checking in at the airport which costs money ($100AUD!) and of course baggage fees which are quite a bit higher than what the Australian market would perhaps tolerate, for example 20kg baggage on a 1:50 flight on Ryanair $60, Jetstar charges $27 for a MEL-OOL flight. UK market has been trained differently to the Australian market, so it will be interesting to see how Bonza will fit in.

 

[Revenge]

Of course Ryanair make a chunk of their money from ancilliary fares - like checking in at the airport which costs money ($100AUD!) and of course baggage fees which are quite a bit higher than what the Australian market would perhaps tolerate, for example 20kg baggage on a 1:50 flight on Ryanair $60, Jetstar charges $27 for a MEL-OOL flight. UK market has been trained differently to the Australian market, so it will be interesting to see how Bonza will fit in.

Yes and it's a lot easier to get to LTN or STN as an alternative to flying from LHR. I can't see many people from BNE for example travelling from MCY just for a cheaper fare.

 

[dajop]

Yes and it's a lot easier to get to LTN or STN as an alternative to flying from LHR. I can't see many people from BNE for example travelling from MCY just for a cheaper fare.

Although I don't think Bonza's strategy is about MCY being an alternative for Brisbane residents to BNE. It's more about inbound traffic for holidays on Sunshine Coast + serving the local population (Sunshine Coast + Gympie councils) of 400,000 people.

(although there may be some niches - if you're in the northern suburbs of Brisbane and want to fly to Mildura or Albury, say, it may be quicker and cheaper than connecting through SYD or MEL, but this market is probably measured in 10s of people per year rather than 1000s per month.)

 

[PineappleSkip]

I can't see many people from BNE for example travelling from MCY just for a cheaper fare.

We are equidistant from MCY and BNE and aware that parking is another price factor if you're bargain hunting. The cheapest rates at MCY can be half as much again as at BNE. But I would be happy to see MCY prosper as a hub.

I think the fundamental flaw in Bonza's strategy is the way they have boxed themselves out of so much of the leisure travel market. Sure they cover lots of places leisure travellers go, but very little of where they come from.

Australia's demographics are totally unlike Europe, a little less so the US, because the population is so concentrated in the largest cities. There are few countries in the world where it is more concentrated. If you write Sydney out of the NSW equation and Brisbane/Gold Coast out of that for Qld, you have immediately cut yourself out of 2/3 of those state markets. And the other 1/3 is thinly spread and a handful of destinations is only a sample pack of the regional population. Vic is even more concentrated but they have so few flights into MEL and AVV.

Cheers skip

 

[dajop]

you have immediately cut yourself out of 2/3 of those state markets. And the other 1/3 is thinly spread and a handful of destinations is only a sample pack of the regional population. Vic is even more concentrated but they have so few flights into MEL and AVV.

But by cutting out 2/3 of those markets, you are also minimising your competition with Qanstar and Virgin - Bonza knows they will never win those contests. Ever. Qanstar and Bain will simply lower fares until Bonza is bled dry. So instead of looking at a <1% chance of being succcesful you are looking at probably a 10% chance of being successful.

What surprises me, is not the underservicing of the capital city markets, but the complete absence of OOL. If you are running leisure services out of MQL and ABX, for example, MCY has some appeal, but how can you be serious without OOL in the mix?

 

[moa999]

Ryanair also works by often getting subsidies to fly to the airports (often from state governments). Just don't see that happening in Australia.

Also the current rocketing oil price is not good for any airline, let alone one running on a low fares model.

 

[dajop]

Also the current rocketing oil price is not good for any airline, let alone one running on a low fares model.

For an Australian domestic carrier, which takes their income nearly all in AUD, it may also depend on what happens to the AUD. In the past significant increases in the oil price have correlated with significant increases in the AUD to the point that - at the last peak the oil price - saw it increase around 130% (USD) whilst in AUD terms it increased about 70% over the same period (rough numbers, I did write similar post elsewhere). If aircraft leases are in USD it also can reduce leasing costs in AUD terms too, so the fate for Australian carriers isn't necessarily as bad as for US or European carriers (still, fuel cost increase of 70% isn't great). Currently AUD is moving slightly north, but nowhere near enough to make a difference in terms of fuel prices or leasing costs.

 

[Saab34]

Depends if the west cuts off Russian oil. Seems likely. That will cause a whole heap of new problems.

I can’t see Bonza launching with Oil $150-$200. Unless it’s cheaper to fly and burn cash vs burning through idle leasing costs on the ground.

Perhaps put the brakes on for the next year.