Bonza has its AOC
Fact is we have very little idea what their cost base are, and only an inkling of what the revenue is with ticket pricing and apparent loads. And being private we may never know as they are not publicly listed and have no requirement to tell us. So it can only be a guess that they are losing money.
For one I give them little chance of being profitable, however I did not expect to see such loads on these routes even at reduced prices.
For one I give them little chance of being profitable, however I did not expect to see such loads on these routes even at reduced prices.
You cannot make a viable profitable business from 4 aircraft. Overheads would be significant, and they also have very expensive equipment costs, that is something that Tiger struggled with, they couldn't get the revenue high enough with lease costs north of $300k per month. Don't get too sucked in by the "cheap leases" comments that get thrown around, 250-300k is the going rate per month for a new aircraft cheap lease, as hinted by the recent Flair repossessions, that appears to be the rate Bonza is paying. Lease costs have actually jumped about 20% within the last year across the market, and with continued supply delays, expect that to increase in the medium term.
New fleets also come with an expected reduced engineering spend, eliminating the need for new entrants to bring it in house and simply outsource minor works. That is not always the case either, cost blowouts can come at any moment, Bonza has had multiple multi day groundings in recent weeks.
New fleets also come with an expected reduced engineering spend, eliminating the need for new entrants to bring it in house and simply outsource minor works. That is not always the case either, cost blowouts can come at any moment, Bonza has had multiple multi day groundings in recent weeks.
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Shouldn’t be long now and we will have the BITRE reporting their real load factors thanks to the unique route structure of Bonza, I expect “fullish” to be sub 50% outside of school holidays
I am pretty sure that BITRE won't post passenger data for a route unless there are two or more airlines operating on it in competition. That, and the requirement for the route average to exceed 8,000 passengers per month, are generally their standard caveats for reporting.
Grand sample of one: 107 pax on AB777 MCY - PPP this evening.
$29 flights Sunny to Coffs and return tonight.
They said back in Feb breakeven was 90%.
They said back in Feb breakeven was 90%.
yes, that’s what was said. As the old saying goes “you cannot sell $10 tickets for $9 and stay in business“ or as the late Don Kendal told me “it’s cheaper to go broke on the ground than in the air!”
I am pretty sure that BITRE won't post passenger data for a route unless there are two or more airlines operating on it in competition. That, and the requirement for the route average to exceed 8,000 passengers per month, are generally their standard caveats for reporting.
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Four months on from Bonza's delayed launch, the budget airline is preparing to expand to a third base as it hopes to buck the trend of failed regional and low-cost carriers.
The Sunshine Coast-based budget airline has been rolling out new routes since February and now flies to 17 mostly regional destinations, with 25 of the 27 routes not flown by other airlines.
Bonza's second hub is in Melbourne, but Bonza chief executive Tim Jordan said strong demand was causing the carrier to look for another base.
"We're certainly looking at growth opportunities in other bases, and also in existing bases, later this year," he said.
Australia has a history of budget and regional carriers that have failed, including Tigerair, JetGo, Compass and OzJet.
Veteran aviation analyst Peter Harbison said the key to low-cost airlines surviving was correcting mistakes quickly.
"You have to watch very, very closely whether something's working or not," he said.
Mr Harbison said Bonza was an "unusual" budget airline because it avoided busy routes such as Sydney to Melbourne in favour of regional destinations such as Mackay, Mildura and Coffs Harbour.
"They're generating new business basically," he said.
But he said it was hard to assess Bonza's progress because "there's not much transparency".
John Sharp, the deputy chairman of competing regional airline Rex, agreed it was hard to comment on Bonza because they were not a publicly listed company and did not publish their data.
A spokesman for Jetstar said the budget airline had been flying for 19 years and "remains committed to being Australia's low fares leader".
Qantas and Virgin declined to comment.
Planes not full
Based on available data, the ABC has calculated that Bonza's planes are about 75 per cent full on average, which is below the 90 per cent target set by Bonza's US owner.
In January, the 777 Partners founder Steve Pasko said the airline needed to operate at near-capacity to maintain profitability, which he predicted would come in the second year of flying.
Mr Harbison said the airline needed to expand to new routes to keep their planes in the air longer.
"If you can keep those aircraft flying for 12 to 15 hours a day, then the unit cost comes down considerably," he said.
"But if they don't have enough routes to fly the aircraft, then that unit cost goes up considerably, and so their break-even cost goes up."
Route changes coming
Bonza is not yet selling tickets for flights past October, but Mr Jordan said the airline would release its schedule covering Christmas and the summer holidays "within weeks".
While some route frequency and timing will change, he sought to assure travellers that no routes would be "imminently" cut.
"What we're trying to do is make sure that we give ourselves the maximum amount of time to learn … and then to reflect that in the schedule going forward," Mr Jordan said.
"We may need to add capacity [or] there may be too much capacity in certain areas."
Mr Jordan said the longer routes had generally been more popular than the shorter routes, which required convincing people to "break a habit" of driving.
Expansion plans
Analyst Mr Harbison nominated Newcastle as an option for Bonza's third hub because the region had a "big catchment".
"It's certainly an ideal spot," he said.
"… Because it does tap that whole Hunter region as well as Northern Sydney all the way up the Central Coast."
A spokesperson for Newcastle Airport said they would "welcome any conversation around establishing airline bases at our airport".
"We look forward to supporting Bonza to grow, and we will welcome conversations to form a strategic partnership when the time comes," the spokesperson said.
Bonza has previously ruled out flying to Sydney Airport because the fees are too expensive and landing slots are too scarce.
The Sunshine Coast-based budget airline has been rolling out new routes since February and now flies to 17 mostly regional destinations, with 25 of the 27 routes not flown by other airlines.
Bonza's second hub is in Melbourne, but Bonza chief executive Tim Jordan said strong demand was causing the carrier to look for another base.
"We're certainly looking at growth opportunities in other bases, and also in existing bases, later this year," he said.
Australia has a history of budget and regional carriers that have failed, including Tigerair, JetGo, Compass and OzJet.
Veteran aviation analyst Peter Harbison said the key to low-cost airlines surviving was correcting mistakes quickly.
"You have to watch very, very closely whether something's working or not," he said.
Mr Harbison said Bonza was an "unusual" budget airline because it avoided busy routes such as Sydney to Melbourne in favour of regional destinations such as Mackay, Mildura and Coffs Harbour.
"They're generating new business basically," he said.
But he said it was hard to assess Bonza's progress because "there's not much transparency".
John Sharp, the deputy chairman of competing regional airline Rex, agreed it was hard to comment on Bonza because they were not a publicly listed company and did not publish their data.
A spokesman for Jetstar said the budget airline had been flying for 19 years and "remains committed to being Australia's low fares leader".
Qantas and Virgin declined to comment.
Planes not full
Based on available data, the ABC has calculated that Bonza's planes are about 75 per cent full on average, which is below the 90 per cent target set by Bonza's US owner.
In January, the 777 Partners founder Steve Pasko said the airline needed to operate at near-capacity to maintain profitability, which he predicted would come in the second year of flying.
Mr Harbison said the airline needed to expand to new routes to keep their planes in the air longer.
"If you can keep those aircraft flying for 12 to 15 hours a day, then the unit cost comes down considerably," he said.
"But if they don't have enough routes to fly the aircraft, then that unit cost goes up considerably, and so their break-even cost goes up."
Route changes coming
Bonza is not yet selling tickets for flights past October, but Mr Jordan said the airline would release its schedule covering Christmas and the summer holidays "within weeks".
While some route frequency and timing will change, he sought to assure travellers that no routes would be "imminently" cut.
"What we're trying to do is make sure that we give ourselves the maximum amount of time to learn … and then to reflect that in the schedule going forward," Mr Jordan said.
"We may need to add capacity [or] there may be too much capacity in certain areas."
Mr Jordan said the longer routes had generally been more popular than the shorter routes, which required convincing people to "break a habit" of driving.
Expansion plans
Analyst Mr Harbison nominated Newcastle as an option for Bonza's third hub because the region had a "big catchment".
"It's certainly an ideal spot," he said.
"… Because it does tap that whole Hunter region as well as Northern Sydney all the way up the Central Coast."
A spokesperson for Newcastle Airport said they would "welcome any conversation around establishing airline bases at our airport".
"We look forward to supporting Bonza to grow, and we will welcome conversations to form a strategic partnership when the time comes," the spokesperson said.
Bonza has previously ruled out flying to Sydney Airport because the fees are too expensive and landing slots are too scarce.
Not sure that NTL would be a logical next base for AB with minimal tourism and the big cities already with services by QF/JQ and VA
So unless they want to go head to head, which I thought they were trying to avoid
OOL or CNS and likely the latter, would be my guess at a next base linking the same regional ports they now serve or possibly WTB linking capitals
But you can only imaging what they have planned for WSI....
So unless they want to go head to head, which I thought they were trying to avoid
OOL or CNS and likely the latter, would be my guess at a next base linking the same regional ports they now serve or possibly WTB linking capitals
But you can only imaging what they have planned for WSI....
Don’t forget they go where the money is with regards to new bases. Adelaide and Melbourne are generally the front runners when it comes to offering subsidies. Perth isn’t known for handouts, neither is Brisbane. That is the airport, tourism body and government all in sync.
They could cannibalise their own routes. Albury to the Gold Coast and Sunny Coast wouldn’t work. Possibly the same to both Cairns and Sunny.
They could cannibalise their own routes. Albury to the Gold Coast and Sunny Coast wouldn’t work. Possibly the same to both Cairns and Sunny.
Don’t forget they go where the money is with regards to new bases. Adelaide and Melbourne are generally the front runners when it comes to offering subsidies. Perth isn’t known for handouts, neither is Brisbane. That is the airport, tourism body and government all in sync.
They could cannibalise their own routes. Albury to the Gold Coast and Sunny Coast wouldn’t work. Possibly the same to both Cairns and Sunny.
They could cannibalise their own routes. Albury to the Gold Coast and Sunny Coast wouldn’t work. Possibly the same to both Cairns and Sunny.
I assumed prior to start up that they may have enhanced their loads by offering connection flights say from ABX to CNS via MCY
Based this on the almost equal segments north and south of MCY and with these routes it looked like a good way to get bums on seats
Yeah I get that a LCC model is not usually set up this way but could have worked at MCY with everything set up right
2 tickets
Through luggage separated and re loaded
Onward passengers offload straight to departures area pre checked
Would have been a good way to test the waters on regional NSW to Cairns
Looks like they have just dropped mins, FO non type rated and 750hrs. A whole wave of cancellations next week due to no crew apparently.
Bonza and Rex will have continued issues, especially FOs, in the capital cities, unless they address the pay issue. The days re a new startup and offering bottom dollar wages for the first few years are over, unless they enjoy cancellations.
Bonza and Rex will have continued issues, especially FOs, in the capital cities, unless they address the pay issue. The days re a new startup and offering bottom dollar wages for the first few years are over, unless they enjoy cancellations.
The MEL - MIA flight returned to MEL yesterday, apparently this was the ACARS message sent.
‘MNT CARRIED OUT POST 1 JUN 23 1937 UTC CRS IS NO LONGER VALID.
CONFIRM RETURN TO MEL AS ADVISED BY MNT.
THANKS OCC’
‘MNT CARRIED OUT POST 1 JUN 23 1937 UTC CRS IS NO LONGER VALID.
CONFIRM RETURN TO MEL AS ADVISED BY MNT.
THANKS OCC’