RIP Bonza
People need to stop saying this. Of course, the predictable response from the brainless media has been that it's all Qantas' and Virgin's fault for their duopoly. Except that this airline did not operate on any routes that I can see that either QF or VA operated on and the whole thing appears to have been stymied by a new owner of the aircraft who's decided that they can make more money leasing them to someone else.
If Qantas or Virgin had anything like a monopoly, there wouldn't be an Air North or a Rex.
Rex in particular has proven that if you pick the right market, by in their case, combining two previous regional carriers into one, giving them scale, then take your time and move into mainline flying on trunk routes, you can build and expand a sustainable business.
The media and others need to stop blaming Qantas and Virgin for bad business models and lack of planning.
Take out the Qantas portion of the market and Virgin Australia has nearly all the rest, so it's not a Qantas monopoly. I seem to remember part of Virgin's demise during Covid can be traced in part back to it's former CEO deciding to initiate a fare war with Qantas, along with introducing A330s on exorbitant leases that ran at a loss, parking major parts of the fleet then paying Alliance to do the flying, dumping the A320 from TT and introducing the 737, letting most of the A320 drivers go then realising that hadn't got the 737 on the AOC yet, having 737 drivers sitting around with no flying to do - to say nothing of the utter cluster**k that was TT operating into DPS, ignoring Indonesian government directions v.v. not subcontracting the route(s), even to a 100% subsidiary.
Pathetically bad business decisions stopped Virgin from steadily increasing it's market share and clawing back more of the market from QF.
I just wonder when the penny is going to drop in this country with the realisation that a population of 27M people cannot sustain more than 2 major carriers other than smaller ones with pretty much niche markets.
Remind me, how many major airlines are there in Canada again, with population not much more than ours (5-10M more)? Seem to remember them once having AC and CP, CP basically collapsed and had to be absorbed into AC, then WS emerged and back to no more than 2 major carriers (yes, I know TS exists but it's a minnow compared to WS and AC, a bit like Rex but international focused).
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One of Australia’s resident aviation expert has been busy hitting the airwaves, with the demise of Bonza.
Thankfully Australia has Qantasflot to keep us flying!
Remember how Qantas led by Geoff Dixon stepped up and saved the day when Ansett stopped operating. Brought a tear to my eye, not to mention the hip pocket!
RIP Bonza.
Thankfully Australia has Qantasflot to keep us flying!
Remember how Qantas led by Geoff Dixon stepped up and saved the day when Ansett stopped operating. Brought a tear to my eye, not to mention the hip pocket!
RIP Bonza.
Ansett was a great airline but pathetically managed, raped for any asset of value by the two amigos during the late 70s and 80s so when things went bad there was nothing to sell, especially since those two removed things like the media assets, TV networks, etc. and road transport, sold the DC-9s to a shelf company in the Caymans allegedly for a 10th of their value then on-sold them and pocketed the rest, all while lumbering it with high wages by rolling over every time the unions threatened action and a mix-match of different aircraft, many of which were designed to do the same job - like A320s and 737s. On top of that, apart from the original five 767-277s, ALL the other 767s were different, down to their seating configurations and ACARS units, size of the cargo doors, etc. Don't get me started on the ludicrous FE on a 767.
Abeles poured millions into the Islands with no prospect of every achieving a payback on investment and while withering on the vine, they went on a spending spree buying every other half-collapsed airline.
An arrogant Air NZ moving in and buying the second half for a ridiculous price just set the scene to finish off what was half dead anyway.
None of that was Qantas' fault. I remember after the difficult merger with TN, AN had the clear majority of the market for a number of years. Both airlines had their chances, one of them blew it.
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If Qantas or Virgin had anything like a monopoly, there wouldn't be an Air North or a Rex.
Rex in particular has proven that if you pick the right market, by in their case, combining two previous regional carriers into one, giving them scale, then take your time and move into mainline flying on trunk routes, you can build and expand a sustainable business.
I'll have a pint of whatever you're smoking. Air North operates in places QF don't really care about because its just sand and flies, and Rex only exists because the previous government handed them ans QF a dumpster full of cash during covid to maintain regional routes, that they spunked on jet operations.
Rex in particular has proven that if you pick the right market, by in their case, combining two previous regional carriers into one, giving them scale, then take your time and move into mainline flying on trunk routes, you can build and expand a sustainable business.
I'll have a pint of whatever you're smoking. Air North operates in places QF don't really care about because its just sand and flies, and Rex only exists because the previous government handed them ans QF a dumpster full of cash during covid to maintain regional routes, that they spunked on jet operations.
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My presumption about Rex 737 operations in #23 was clearly optimistic based on the several more well informed responses.
It makes me wonder what "economies of scale" can be achieved by larger operators of mainline jets such as Qantas/Jetstar and VA compared to say Bonza or Rex, each with only a handful of 737s?
I am also curious if there are cost models out there that could assess the impact on average load factors as the number of competing airlines in the Australian domestic market is increased from 2 to 3 to 4 etc. Surely, the more there are, the less viable the industry becomes for all of them, or the higher the airfares would need to become. Perhaps '3' is the 'sweet spot' for major airlines in our market?
It makes me wonder what "economies of scale" can be achieved by larger operators of mainline jets such as Qantas/Jetstar and VA compared to say Bonza or Rex, each with only a handful of 737s?
I am also curious if there are cost models out there that could assess the impact on average load factors as the number of competing airlines in the Australian domestic market is increased from 2 to 3 to 4 etc. Surely, the more there are, the less viable the industry becomes for all of them, or the higher the airfares would need to become. Perhaps '3' is the 'sweet spot' for major airlines in our market?
It’s a great question, and scale is important, but being another someone else won’t work. Which is why Bonza did what it did, but a low cost, sustainable regional like aircraft isn’t available, likely in the far future, just nothing at the moment. It will likely be something electric, but not in our lifetime.
Rex is now operating on all these high margin routes, it’s just they don’t know how to chase that margin, they are loss making. They need new management in order to move that place towards profitability, it appears they are heading for bankruptcy. They have little in the way of corporate accounts, next to no corporate revenue, so they fly lighter during the week, and heavier on leisure weekends. It is very strange, as they appear to be just doing absolutely nothing and watching the place burn down. I assume they want government handouts to save the Saab bit?
Rex is now operating on all these high margin routes, it’s just they don’t know how to chase that margin, they are loss making. They need new management in order to move that place towards profitability, it appears they are heading for bankruptcy. They have little in the way of corporate accounts, next to no corporate revenue, so they fly lighter during the week, and heavier on leisure weekends. It is very strange, as they appear to be just doing absolutely nothing and watching the place burn down. I assume they want government handouts to save the Saab bit?
If Qantas or Virgin had anything like a monopoly, there wouldn't be an Air North or a Rex.
Rex in particular has proven that if you pick the right market, by in their case, combining two previous regional carriers into one, giving them scale, then take your time and move into mainline flying on trunk routes, you can build and expand a sustainable business.
I'll have a pint of whatever you're smoking. Air North operates in places QF don't really care about because its just sand and flies, and Rex only exists because the previous government handed them ans QF a dumpster full of cash during covid to maintain regional routes, that they spunked on jet operations.
Rex in particular has proven that if you pick the right market, by in their case, combining two previous regional carriers into one, giving them scale, then take your time and move into mainline flying on trunk routes, you can build and expand a sustainable business.
I'll have a pint of whatever you're smoking. Air North operates in places QF don't really care about because its just sand and flies, and Rex only exists because the previous government handed them ans QF a dumpster full of cash during covid to maintain regional routes, that they spunked on jet operations.
Why post links to AFR articles when we all know they are behind a paywall?
On reflection, there was probably a good reason nobody else was flying those obscure routes in a hi cap jet.................
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The comments from the CEO of the maintenance provider AVCRO, as published in Australian Aviation this afternoon, are incredible. Bonza was close to attracting a local buyer before its aircraft were suddenly grounded on Tuesday, the company’s maintenance partner has claimed. Speaking exclusively to Australian Aviation, Bradley Davren, CEO of AVCRO, which has provided MRO services to Bonza since the airline’s inception, said that the stricken low-cost carrier was a viable business before entering voluntary administration on Tuesday afternoon due to a lack of aircraft. Davren’s claims come as Bonza’s administrator, Hall Chadwick, is understood to be still searching for new backers for the low-cost carrier, with Bonza flights now grounded until at least next Tuesday. It is the first time a company this intimately connected to Bonza has spoken on the record about the airline’s situation. Davren told Australian Aviation that, in his understanding, a “very serious commitment” had been made by the unnamed local backer before the aircraft were taken. “They were in a position where ultimately the current owner could have just shifted that liability away from themselves and the airline would have kept moving fat, dumb and happy without issue,” he said. “To the best of my interaction with Bonza, a new investor would have simply shifted liability from 777 Partners to another entity and Bonza would have continued trading with the four MAX 8s still leased by AIP under the fiduciary responsibility and control of local investors. “The lead backer, to my understanding, is very well-known and would absolutely do wonders for multiple reasons. Yet to be seen if that eventuates, but had that outcome come to fruition, I suspect you would have seen Bonza kick into overdrive.” According to Davren, Bonza’s business model was working and it was not in financial trouble before the abrupt seizure of its fleet, which was carried out by AVCRO on behalf of the repossessors. “The airline was trading with absolutely no credit issues. Obviously, we would be one of their largest creditors. They were never on stop credit with us. They never even appeared to be trending in that direction, and in fact, it’s unfair to the employees if this is wound up, to suggest that this is the reason why,” he said. “Reading a lot of the articles that suggest there are 300 insolvent airline operations in the country, it’s quite disingenuous to put this one in that same category. “Their load factors are fantastic. Their model works brilliantly, the aircraft are not too big. In my personal opinion, I think they should charge more for what they’re doing, but that’s neither here nor there. That’s a commercial decision on their behalf. And ultimately, there’s no reason that they would be insolvent outside of not having aircraft. That’s never happened in Australia, ever.” Davren told Australian Aviation his understanding was that Bonza’s problem, far from being a lack of money, was solely the lack of aircraft after its four operating 737 MAX 8s were grounded. “Effectively, [Bonza] was a carrier without aircraft. Without access to aircraft, of course they’re naturally going to be insolvent from that day onwards,” he said. “That’s the next logical step – without an opportunity for revenue, obviously, payroll alone is going to be in enormous burden for you. So absolutely, they were not insolvent and it’s quite disingenuous to consider or suggest that they were.”
what the hell is he smoking?
According to The Australian today, Bonza was warned two weeks before the aircraft were repo’d that it was at risk of defaulting on its lease payments.
Employees should be able to pull back the lost wages via the FEG, but I believe it needs to move liquidation for that lever to be pulled. Regardless that will take time to process.
Trust nobody once the Administration process starts. You will get long winded stories and lies. The key players are now trying to work out how they can reimburse themselves. Employees, Suppliers, Customers, take a step back please.
Do yourself a favour and don’t even waste your time tuning into Timbo web catchups.
Trust nobody once the Administration process starts. You will get long winded stories and lies. The key players are now trying to work out how they can reimburse themselves. Employees, Suppliers, Customers, take a step back please.
Do yourself a favour and don’t even waste your time tuning into Timbo web catchups.
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Just shows how a monthly pay roll , in this case the 5th of each month is such a risk for staff. I feel for them.
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Bonza was well in arrears on lease payments and reserves payments too. They have probably been trading insolvent for some time. Tim’s grand plan was a dream and smoke and mirrors sadly for great staff and others including pax who paid for travel that never had a chance of happening particularly after the April notice. What about TJ announcing the 300,000 ticket sale??!
Gold Coast airport has placed concrete bollards behind and in front of one of the Bonza 737s parked there.
Rumour has it that they are owed quite a lot of money.
I can’t believe there is someone out there claiming that Bonza was actually going along alright!
Rumour has it that they are owed quite a lot of money.
I can’t believe there is someone out there claiming that Bonza was actually going along alright!