RIP Bonza
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The number of airline skeletons in the Australian airline closet has inevitably increased by another one. A much larger closet is called for.
There are two factors common to almost all those skeletons - being grossly and obscenely undercapitalised and fanciful business plans based on totally fictitious, unachievable traffic projections. Anything to do with the business of aviation is very capital intensive, compounded by a low 25 million population with 70% plus domicile in three or four coastal cities and Australia being a very expensive tourist destination.
And unless an airline has cast iron operating cost guarantees from the aircraft manufacturers (which is most unlikely), forget the manufacturers aircraft operating cost projections, inevitably authored by Aesop himself!
I remember many years ago running into Bryan Grey at Brisbane Airport shortly after he formed Compass. When I asked how business was going, his answer "Loadings are great, load factors over 90%. On current air fares our break even load factor is around 115%". Having known Bryan for many years I was very surprised he didn't see an air fare war looming!
Even in a duopoly airline structure, since the demise of the two airline policy and legislated protection for the players, historically one of the duopoly airlines has always been financially disadvantaged, right back to AN - TN days and up to today's QF - VA.
Spanish philosopher and novelist George Santayana once wrote: "Those who cannot remember the past are condemned to repeat the mistakes (in the future)".
Bonza will not be the last skeleton into the greatly enlarged closet of demised airlines.
There are two factors common to almost all those skeletons - being grossly and obscenely undercapitalised and fanciful business plans based on totally fictitious, unachievable traffic projections. Anything to do with the business of aviation is very capital intensive, compounded by a low 25 million population with 70% plus domicile in three or four coastal cities and Australia being a very expensive tourist destination.
And unless an airline has cast iron operating cost guarantees from the aircraft manufacturers (which is most unlikely), forget the manufacturers aircraft operating cost projections, inevitably authored by Aesop himself!
I remember many years ago running into Bryan Grey at Brisbane Airport shortly after he formed Compass. When I asked how business was going, his answer "Loadings are great, load factors over 90%. On current air fares our break even load factor is around 115%". Having known Bryan for many years I was very surprised he didn't see an air fare war looming!
Even in a duopoly airline structure, since the demise of the two airline policy and legislated protection for the players, historically one of the duopoly airlines has always been financially disadvantaged, right back to AN - TN days and up to today's QF - VA.
Spanish philosopher and novelist George Santayana once wrote: "Those who cannot remember the past are condemned to repeat the mistakes (in the future)".
Bonza will not be the last skeleton into the greatly enlarged closet of demised airlines.
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IMO the only hope for aviation in Australia is a government with balls to neuter the largest carrier by restricting slots or maybe forcing the divestment of Jetstar. I dream , it will never happen.
That is the Australian way. Get something that works and pays for itself, employs thousands of people and get the government involved to hobble it. When people pay more to park their cars at an airport than they are willing to pay for an airline ticket then the problem lies elsewhere.
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That is the Australian way. Get something that works and pays for itself, employs thousands of people and get the government involved to hobble it. When people pay more to park their cars at an airport than they are willing to pay for an airline ticket then the problem lies elsewhere.
Pays for itself, just like the money they received to survive during Covid?
If by "still doing ok", you mean still losing at least $1 million a week on jet ops, then yes. For April, they just closed out easily their worst month of the current FY (and April is generally one of the stronger months for domestic travel in H2).
That is the Australian way. Get something that works and pays for itself, employs thousands of people and get the government involved to hobble it. When people pay more to park their cars at an airport than they are willing to pay for an airline ticket then the problem lies elsewhere.
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To stay on topic, I am yet to meet anyone who thought this was a business model that had any long term survival prospect. I’m sure people smarter than I can tell you flying into places with a small population at below cost tickets just isn’t going to last long, but everyone wants a government subsidy don’t they.
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Australia's Bonza goes bust as AIP Capital seizes aircraft
By Andrew Curran30APR2024
Editorial Comment: Updated to add information about Bonza entering into voluntary administration. - 30APR2024 - 06:56 UTC
https://www.ch-aviation.com/news/139...eizes-aircraftBonza
(AB, Sunshine Coast) has suspended all flights after its aircraft were repossessed. Following weeks of speculation about the airline's future, Bonza pulled the plug early on April 30, axing that day's flights. CEO Tim Jordan said flights had been put on hold but did not reveal that aircraft asset manager AIP Capital had seized his fleet overnight.
"Bonza has temporarily suspended services due to be operated today, as discussions are currently underway regarding the ongoing viability of the business," he said via a statement. Bonza's booking app and website have also blanked out all future flights, but neither platform currently mentions the service suspension.
In recent weeks, Bonza has refuted reports it was in trouble, with a spokesperson telling ch-aviation the airline was "not showing signs of stress." This was despite confirmation that Bonza's financiers had retained KordaMentha to advise on whether they should keep supporting the carrier.
Bonza launched into the Australian market in early 2023, backed by 777 Partners, and headed by Jordan, who had established his aviation reputation as the CEO of FlyArystan (KC, Astana Nursultan Nazarbayev) during its successful launch. However, his model of deploying 777 Partners-supplied B737-8s onto thin Australian secondary routes, often to airports with limited local population catchments, immediately raised eyebrows. It later emerged that many airports had offered Bonza a 12-month holiday from landing fees and charges. However, those holiday periods have started to expire, rendering already economically challenging routes unviable.
Bonza was also constrained by a lack of aircraft. Jordan said he needed ten to break even, but he never got more than half that amount. 777 Partners diverted aircraft due to Bonza to its other airline, Flair Airlines (Edmonton), which was experiencing fleet problems of its own. A recent deal to convert two wet-leased Flair aircraft into longer-term dry leases fell apart in recent months, with one returning to Canada and the other parked at Sunshine Coast awaiting flight clearance by the Civil Aviation Safety Authority and local registration. However, after conducting a test flight on April 29, its first flight in two months, C-FLHI (msn 61804) is believed to be returning to Canada imminently.
Excluding the parked Flair B737-8, Bonza had four aircraft in its fleet when flights stopped, including VH-UIK (msn 43975), VH-UJK (msn 43974), VH-UJT (msn 62533), and VH-UKH (msn 61864). All are managed by AIP Capital, 777 Partner's asset manager, which until recently owned a 51% stake in the thirty B737-8s linked to the Miami-based alternative investment platform. AIP now retains management rights and ch-aviation understands the company made its move to seize the four aircraft after they returned to their bases at Sunshine Coast Airport, Gold Coast Coolangatta, and Melbourne Tullamarine late on April 29, informing air traffic control of the action and barring their departures. The snap action reportedly took Bonza's management by surprise.
In early April, AIP transferred its stake in the 30 aircraft to a new investment vehicle called Phoenix Aviation Capital. Insurance company A-Cap owns 100% of Phoenix. After news of the groundings and seizures broke, Jordan said he remained in talks to resolve the problem as "quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market.”
Qantas, Jetstar Airways, and Virgin Australia have stepped in to offer stranded passengers complimentary flights to the airport nearest to their final destination, subject to space availability. However, there is relatively little route overlap between Bonza's routes and those operated by its bigger competitors.
Later on April 30, ch-aviation learned that Bonza will file for voluntary administration in the Australian courts and has appointed Hall Chadwick as administrator. The airline is also expected to announce an ongoing suspension of flights shortly.
...
Bonza was also constrained by a lack of aircraft. Jordan said he needed ten to break even, ...
Bonza was also constrained by a lack of aircraft. Jordan said he needed ten to break even, ...
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Delusional! With their pricing, they would conservatively need to move 7,500 pax a day to break even with ten MAX 8s.
But this is off track,
good luck to all those that are at Bonza.
Unfortunately history isn’t kind to airlines that believe they have a rescue package or new
investors in line to continue the operation.
Dealing with anti-competitive behaviour in a duopoly to ensure a free and fair market is hardly 'hobbling it'.
Last edited by antheads; 1st May 2024 at 03:42.
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Jeesus vomit inducing stuff - we screwed your previous employer into the ground - but maybe you might want to work for us - using the skills they taught you so we won't have to
Low cost airlines just encourage poor people to travel. The VFR/point to point leisure market is even worse.They should be working, not visiting Aunt Betty in Mildura on a $69 fare.
When they do, all they do is spread diseases like STIs or COVID..... Bring back a regulated airline industry, increase airfares so YSSY-YMML is back around $500 each way. Safety will improve and carbon emissions will reduce.
Alfred E. Kahn publicly commented that the deregulation the American airline industry in the late 1970's was the worst recommendation he ever made.
I am sorry for the Bonza staff - but the spread of Syphilis and COVID will reduce and the environment will also be better for it...
Air travel should be on a cost plus basis and only those who work hard and earn a decent income should be allowed to fly...
When they do, all they do is spread diseases like STIs or COVID..... Bring back a regulated airline industry, increase airfares so YSSY-YMML is back around $500 each way. Safety will improve and carbon emissions will reduce.
Alfred E. Kahn publicly commented that the deregulation the American airline industry in the late 1970's was the worst recommendation he ever made.
I am sorry for the Bonza staff - but the spread of Syphilis and COVID will reduce and the environment will also be better for it...
Air travel should be on a cost plus basis and only those who work hard and earn a decent income should be allowed to fly...
let’s continue with the fiction over facts. The hand out is called the dole. That’s what the company did and the government called it something else to hide the fact that management and government installed a government hand out. The dole or let’s use the catch phrase “jobkeeper”.
But this is off track,
good luck to all those that are at Bonza.
Unfortunately history isn’t kind to airlines that believe they have a rescue package or new
investors in line to continue the operation.
But this is off track,
good luck to all those that are at Bonza.
Unfortunately history isn’t kind to airlines that believe they have a rescue package or new
investors in line to continue the operation.