A history of failure: Bonza set to join the airline scrap heap - InDaily (2024)

Bonza’s financial crisisthreatens to send the budget airline to the scrap heap of history, alongside other failed third airlines in Australia like Tigerair, Air Australia and Ansett.

Qantas and Virgin Australia remain dominant fixtures in the current market, with Bonza the latest carrier to fall in a market that has seen multiple attempts to disrupt the airline duopoly.

Jetstar remains the dominant low-cost offering in Australia but is owned by Qantas, while Rex operates on mostly regional routes and on a much smaller scale to the two big players.

Justin Wastnage, an adjunct industry expert at Griffith University, said the lack of density in Australia’s population centres plays a huge role in the viability of airlines outside of the big two.

“The United States has 250 population centres with over 100,000 people, while Europe has around 400,” he said.

“Australia has 27 cities greater than 100,000 within narrow-body [aircraft] range, including New Zealand and New Caledonia.”

American private investment group 777 Partners owns Bonza, alongside several football clubs around the world – including a stake in A-Leagues side Melbourne Victory and Canadian low-cost carrier Flair Airlines.

777 Partners have been accused of breaching contracts, failing to pay debts andacting fraudulentlythroughout its business holdings.

A history of failure

Australia has seen several airlines come and go over the years.

Ansett Australia was founded in 1936, but heading to the turn of the millennium it was losing $180 million a year.

It collapsed in March 2002after a turbulent period of financial difficulty, almost two years after Virgin launched in Australia.

It entered administration in 2012,stranding 4000 passengersin overseas holiday destinations and domestic airports in similar circ*mstances to Bonza.

When the books were looked over, it was found that it owed $90 million to creditors and was unsellable.

Other airlines like Tigerair Australia have tried to offer similar low-cost offerings to Bonza, although they have quickly run into trouble.

After being launched in 2007 by its Singaporean owners, Tigerair was bought by Virgin Australia in 2014 forjust $1.

It ceased operationsduring the Covid-19 pandemic as travel was stymied and planes were grounded.

Rex Airlines was launched in 2002 after a consortium set up by ex-Ansett Australia employees merged two other airlines – previously owned by Ansett – to form the new company.

Rex has instead focused on operating routes that Virgin Australia and Qantas do not while offering a cheaper alternative on popular routes, such as from Adelaide to Port Lincoln and Mt Gambier.

Wastnage said that the airline has remained viable because of the focus on regional routes feeding into major airports and being able to get a good deal on leasing airplanes.

“They have loyalty from their customers and the pilots whom they train themselves, who also have good contracts,” he said.

“Bonza played a different game by focusing on offering cheap flights on major routes.”

It launched itsown flight schooland aviation academy in 2008 and hasacquired other airlinesthat focused on fly-in, fly-out services for the mining industry to expand its regional footprint.

“Ticket prices in Melbourne, with Avalon Airport, are around 25 per cent cheaper than Sydney, and in Brisbane with Gold Coast Airport operating as a kind of secondary airport we see similar results,” he said.

“Western Sydney Airport should reduce constraint on Sydney airport and open up access for airlines.”

– TND