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New 'Bonza' LCC launches middle 2022 with B737 MAX

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New 'Bonza' LCC launches middle 2022 with B737 MAX

Old 6th Aug 2022, 02:15
  #661 (permalink)  
 
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As long as one single entity tries to maintain at least a 60% share of the market then there is definitely room for competition. QF holds a monopolistic advantage, which does stifle competition, it is being eroded slowly, but surely. As many domestic carriers can exist as you want, if the others are not colluding to destroy new entrants and share the market. This is the same issue throughout a lot of the Australian economy, telco industry, mail industry, etc, all so called free markets but significantly controlled by the ex government incumbents. Australia has very weak anti competition laws and anti monopoly laws, so the large companies basically do what they want and drag it out in court with their vast resources. Then if you dare touch actually get anywhere with these ex gov companies they pull out the old 'but we're Australian card' and garner support, when in fact they are just another public company now.

And if you count QF and J* as separate companies you are delusional. Its like saying there's more than 3 or so players in the insurance market, eg YouI is a branch of AAMI for more discerning customers (who like to pay more for the same thing) and so on.
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Old 6th Aug 2022, 03:25
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Originally Posted by 43Inches View Post
As long as one single entity tries to maintain at least a 60% share of the market then there is definitely room for competition. QF holds a monopolistic advantage, which does stifle competition, it is being eroded slowly, but surely. As many domestic carriers can exist as you want, if the others are not colluding to destroy new entrants and share the market. This is the same issue throughout a lot of the Australian economy, telco industry, mail industry, etc, all so called free markets but significantly controlled by the ex government incumbents. Australia has very weak anti competition laws and anti monopoly laws, so the large companies basically do what they want and drag it out in court with their vast resources. Then if you dare touch actually get anywhere with these ex gov companies they pull out the old 'but we're Australian card' and garner support, when in fact they are just another public company now.

And if you count QF and J* as separate companies you are delusional. Its like saying there's more than 3 or so players in the insurance market, eg YouI is a branch of AAMI for more discerning customers (who like to pay more for the same thing) and so on.
Agreed
One could look at Canada, yes larger population but still carrying 6 Jet airlines of varying sizes and 1 LCC offshoot of AC
In Oz even a thin route like Newcastle to Brisbane IMO could support 4 airlines with 2-3 flights per day each as done with many Asian, European and US pairs
Bonza looks to be proposing a different model however, more like Ryanair, with a group of hubs at secondary airports
Maroochydore (Brisbane North)
Wellcamp (Brisbane West) not a current hub, but on the cards...
Melbourne Avalon, I'm betting on this being their second major hub
SWA, note that they have nothing to Kingsford Smith, likely waiting for SWA to be completed
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Old 6th Aug 2022, 03:34
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You forgot Brisbane South (Gold Coast), Brisbane Northwest (Emerald) and Brisbane Southwest (Tamworth).

Absolutely nobody is driving from the Brisbane metro area to either Toowoomba or the Sunny Coast (which despite your claims is not ĎBrisbane Northí) to catch a flight.

Is this just another BNEA320 alias??
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Old 6th Aug 2022, 04:50
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The Australian aviation landscape does not mirror any other countries and the new aspirations only inspire if dreaming about it. Simple facts are seen in demographics with about 70% of the population living in the golden triangle regions. Only a couple of mass tourism places and a few close holiday areas.

The LCC markets of Europe and North America contain several hundred million potential punters and dozens of go-to destinations.
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Old 6th Aug 2022, 05:07
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From July 2011…

TIGER Airways Australia's new CEO says the grounded airline will have a long-term future in Australia.Tony Davis, brought in from the airline's Singapore-based parent company, said he was conducting a comprehensive review of the Australian operation to give the company a fresh start.

With Tiger now grounded for a month by the Civil Aviation Safety Authority (CASA), Mr Davis said the airline was working to address the regulator's safety concerns.

"We're clearly addressing the issues that have been identified by CASA and in addition to that we're completing our own review," Mr Davis told ABC TV last night.

"So, as I said before, it's about a fresh start, it's about addressing anything that needs to be addressed and it's about having a long-term, viable, safe airline here in Australia."

Mr Davis was the CEO of Singapore-based Tiger Airways Holdings but took over as chief executive of the Australian company from Wednesday night.

He replaced Crawford Rix, who Tiger announced was leaving the company after CASA extended its grounding.

Some industry observers have questioned whether Tiger Australia will be able to come back after its unprecedented grounding but Mr Davis said the Tiger Airways Holdings board was absolutely committed to the long-term success of the business in Australia.

"We're investing significantly in the long-term future of Tiger Australia, and my appointment to lead the organisation is a tangible demonstration of that," he said.

Tiger Airways Holdings has said the grounding is costing $S2 million ($1.5 million) a week.

"It's costing us in tangible terms about $2 million a week, so obviously the fact that we've decided to suspend the services until the end of July means that that's a significant cost," Mr Davis said.

Mr Davis said consumers wanted Tiger to remain in the Australian market, saying it had reduced airfares dramatically since starting flights four years ago.

"We're committed to a long-term future and I think Australians want us to be here to ensure that there is competition in the air sector."
Those who fail to learn from history are doomed to repeat it. Winston Churchill
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Old 6th Aug 2022, 05:08
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Originally Posted by 43Inches View Post
As long as one single entity tries to maintain at least a 60% share of the market then there is definitely room for competition. QF holds a monopolistic advantage, which does stifle competition, it is being eroded slowly, but surely. As many domestic carriers can exist as you want, if the others are not colluding to destroy new entrants and share the market. This is the same issue throughout a lot of the Australian economy, telco industry, mail industry, etc, all so called free markets but significantly controlled by the ex government incumbents. Australia has very weak anti competition laws and anti monopoly laws, so the large companies basically do what they want and drag it out in court with their vast resources. Then if you dare touch actually get anywhere with these ex gov companies they pull out the old 'but we're Australian card' and garner support, when in fact they are just another public company now.

And if you count QF and J* as separate companies you are delusional. Its like saying there's more than 3 or so players in the insurance market, eg YouI is a branch of AAMI for more discerning customers (who like to pay more for the same thing) and so on.
Call it what you will, regardless of whether it is 3 seperate airlines, or 2 individuals airlines with the third one being owned by one of the other two, 3 domestic jet operations maximum is what Australia can accomodate long term. Short term, yes there could be 5 domestic airlines or there could be 50, but long term only 3 would survive.
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Old 6th Aug 2022, 05:12
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Originally Posted by TBM-Legend View Post
The Australian aviation landscape does not mirror any other countries and the new aspirations only inspire if dreaming about it. Simple facts are seen in demographics with about 70% of the population living in the golden triangle regions. Only a couple of mass tourism places and a few close holiday areas.

The LCC markets of Europe and North America contain several hundred million potential punters and dozens of go-to destinations.
Well said Icarus. Australia is a unique environment, we may have a huge land mass but we have a tiny population in comparison to Europe, hence the reason Europe has a number of Operators supporting those several hundred million pax per year.
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Old 6th Aug 2022, 05:31
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Dr Tony Weber write this one, will be interesting to see what happens.

As a Novocastrian it would be wrong of me not to comment on 2 new aviation markets on which new ULCC Bonza expects to fly over the coming period, that being NTL-MCY (Newcastle-Sunshine Coast) and NTL-PPP (Newcastle-Whitsundays).

To determine the expected demand on these city pairs, I draw insight from a model of demand called the gravity model. The gravity model essentially says that pax volumes differ across city pairs because of the combined population and income per capita of the city pairs and the distance between them. Immigration patterns may also play a role in driving city pair demand (the number of people living in Newcastle originally from the Whitsundays or the Sunshine Coast and vice-versa) as will the extent of business trade flows between the city pairs.

The combined populations will be the biggest driver. In the case of Newcastle Airport the catchment is not straightforward to understand. It clearly includes Newcastle and surrounds and the Hunter Valley. But it may also include half the central coast (south of the airport) and as far north as Forster-Tuncurry. The population catchment may not fall terribly short of 1m. The population catchment of the Sunshine Coast is in the order of 350k and the Whitsundays is around 35k. The NTL-MCY sector length is 697km and the NTL-PPP sector length is 1,401km. Tourism data over 2019 indicates that the size of the Hunter+Central Coast-Sunshine Coast overnight tourism market is around 230k pax movements per year. A daily flight on a 186-seat aircraft at a 90% seat factor (around average for a ULCC) involves carrying 122k pax.

This means that Bonza on NTL-MCY would have to capture around 50% of the pre-Covid total market (all transport modes) or capture a lower percentage of the current market and stimulate the residual required demand. In my view this is not inconceivable. The meat in the demand and route (NTL-MCY) viability sandwich is whether the yield (RASK) that Bonza would need to target to sufficiently stimulate the market is above CASK.

Assuming Bonza is similar to a Spirit ULCC, it's CASK on NTL-MCY will be around 9.2 US c/ASK. Assuming an EBIT margin of 10% this means it would require a RASK of around 10.2 US c/ASK. At a 90% seat factor this implies an average airfare target at a AUD/USD = 0.7 of around A$113 one-way. I estimate that this is not too far away from the explicit cost per pax of a family of 4 driving from NTL to MCY. This route would certainly seem viable to me. The risk will be if profits earned on the route invite entry by a ruthless competitor (I place this probability at 99.9%).

Tourism data indicates that the size of the Hunter+Central Coast-Whistundays market in 2019 was around 40k pax movements. To generate a viable daily service on NTL-PPP requires Bonza to materially stimulate this market. Without boring you with the RASK and CASK detail, I dare say that this route will pose a challenge for Bonza.

I wonder if the A220 is better suited for these routes?
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Old 6th Aug 2022, 06:48
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Originally Posted by Paragraph377 View Post
Well said Icarus. Australia is a unique environment, we may have a huge land mass but we have a tiny population in comparison to Europe, hence the reason Europe has a number of Operators supporting those several hundred million pax per year.
So we rank 3, 18, 24 in the top 50 busiest air routes
USA ranks 29, 32, 43
Europe ranks None in the top 50
India ranks 5, 22, 38
Asian and South America round out the rest

Australia ranks 17th in the world passenger numbers (2019) at 76 million a bit below Canada 11th at 93 million, who have 6 jet type airlines and 1 LCC offshoot of AC
Australia has 2 jet type airlines and 1 LCC offshoot plus now REX and soon to be Bonza
In the fair dinkum department, there is no reason Australia can't sustain 2 majors, 1 LCC offshoot, REX on trunk and Bonza ULCC wherever the end up flying, beyond initial start up routes

Sydney all carriers
Sydney Brisbane 42+ flights per day
Sydney Melbourne 72+ flights per day
Sydney Adelaide 15+ flights per day
Sydney Gold Coast 22+ flights per day
Sydney Perth 13+ flights per day
​​​​​​​Sydney Cairns 8+ flights per day
All of the above could reasonably sustain 1-5 flights per day from a second tier carrier without affecting QF/JQ and VAs frequencies overly
This may upset PoppaJo, however at least REX is fighting for it's place and with 777s backing, Bonza may very well take a share as well

Let me ask this question
With REX discounting on the triangle and Adelaide and hypothesizing that Bonza also have a crack on the triangle
Has anyone done the costing of QF/JQ and VA matching or undercutting new entrants REX and Bonza, perhaps including Impulse, Compass 1 and 2, EWA and VB, in their attempts to eradicate said newcomers to protect the duopoly ?
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Old 6th Aug 2022, 08:02
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Originally Posted by Deano969 View Post
All of the above could reasonably sustain 1-5 flights per day from a second tier carrier without affecting QF/JQ and VAs frequencies overly
Based on what data and evidence?

Top global rankings. Huge Frequency. That is tied to the corporate traveller. Remove that traffic. We are now not tied to any rankings. We donít have high speed trains. We donít have decent interstate highways, unlike both USA and Europe. The majority of the business traffic wants international feed, lounges, loyalty programs, frequency, 100+ aircraft fleets, did I mention international feed?. Thatís Qantas and Virgin. By all means Rex and Bonza could play for some of that, they will need a billon dollars to attempt that.

Bonza, Tiger and Rex have all said the exact same thing. We need 30 aircraft. Why? Because they need the scale to get the earnings otherwise itís just a waste of time.

You know the Rex model is wrong, when they are empty during the week but full on weekends. Either they become a low cost carrier, or they try and do full service properly. They really need new management to tackle that, not some half arsed job like they are trying at the moment.
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Old 6th Aug 2022, 09:50
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Originally Posted by Deano969 View Post
... Canada 11th at 93 million, who have 6 jet type airlines and 1 LCC offshoot of AC ...
For the sake of clarity, can you name the 6 + 1 Canadian 'jet type airlines' please? The usual rundown of Canadian airlines goes Air Canada, Westjet/Swoop, Porter, Air Transat and Flair. Porter don't fly jets.

Most of those Canadian airlines have reasonable to significant international operations, they're not purely domestic. That's one of the benefits of having all of the rest of North America just over the border.
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Old 6th Aug 2022, 11:49
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Originally Posted by Deano969 View Post
In Oz even a thin route like Newcastle to Brisbane IMO could support 4 airlines with 2-3 flights per day each as done with many Asian, European and US pairs
Iím glad youíre not my CEO DeanoÖÖÖÖ.
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Old 6th Aug 2022, 19:13
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Originally Posted by MickG0105 View Post
For the sake of clarity, can you name the 6 + 1 Canadian 'jet type airlines' please? The usual rundown of Canadian airlines goes Air Canada, Westjet/Swoop, Porter, Air Transat and Flair. Porter don't fly jets.
Air Canada + Rouge
Westjet + Encore
Air Transat
Flair
Sunwing
Porter, no jets but sizable fleet of Q400s
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Old 6th Aug 2022, 20:24
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Porter has ordered a large fleet of Emb 190E2ís to replace Q400ís
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Old 6th Aug 2022, 21:22
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Originally Posted by TBM-Legend View Post
Porter has ordered a large fleet of Emb 190E2ís to replace Q400ís
Hence I included them as a jet type airline
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Old 6th Aug 2022, 22:32
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Originally Posted by Deano969 View Post
In Oz even a thin route like Newcastle to Brisbane IMO could support 4 airlines with 2-3 flights per day each as done with many Asian, European and US pairs
So you are suggesting 2 x 4 x 180 = 1440 seats per day between Newcastle and Brisbane. Up to 3 x 4 x 180 = 2160 seats. ?


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Old 6th Aug 2022, 22:51
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Originally Posted by Deano969 View Post
Air Canada + Rouge
Westjet + Encore
Air Transat
Flair
Sunwing
Porter, no jets but sizable fleet of Q400s
Okey doke, thanks for that. Encore don't fly jets.

Sunwing and Air Transat are built almost exclusively around international travel into the US/Caribbean/Central America.

When you're tallying up the numbers for here where do the likes of Alliance, Airnorth and Cobham/NJS fit into the equation?
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Old 6th Aug 2022, 22:57
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Originally Posted by Icarus2001 View Post
So you are suggesting 2 x 4 x 180 = 1440 seats per day between Newcastle and Brisbane. Up to 3 x 4 x 180 = 2160 seats. ?
Based on current flight schedule on this route we have 3 airlines using Q400ís, F100ís and A320 aircraft a day.

4 x 78 = 312 seats
3 x 100 = 300 seats
2 x 180 = 360 seats

Total 972 seats a day.

IMO I agree that 1440 to 2160 seats a day is not sustainable!
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Old 7th Aug 2022, 09:16
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Originally Posted by BO0M View Post
Do tell whats not to be happy about.

Plenty of VH registered aircraft moved around the world on delivery flights running on SFPs or no designated CAMO. Believe it or not ferry flights aren't cowboy operations they require overflight and landing permits the same way any other aircraft does. Neither of those would be granted unless the aircraft documents were not in order.
Yep thatís correct been involved in quite a few, however non are related to RPT operations.
Letís just wait and see what the outcome will be!
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Old 7th Aug 2022, 09:35
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Originally Posted by TBM-Legend View Post
No oneís business who Bonza use for CAMO and AMO and on here is drivel about salaries. Seems like thatís the level of debate and information. Very Australian it seems
And what about CASA? They probably need to know.
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