Australia’s newest budget airline Bonza took off on its first commercial flight this morning, propelling the company into an increasingly crowded field of players jockeying for a bigger slice of the domestic travel market.
Despite cost headwinds hitting the sector hard, the Sunshine Coast-based Bonza is confident of finding its niche by tackling routes that are not currently serviced by other airlines.
It’s even going one better than fellow underdog Regional Express Airlines (ASX: REX) which has long serviced major regional centres and more recently pushed into capital city markets,
Bonza’s first flight today from its home base on the Sunshine Coast to the Whitsunday Coast highlights the company’s strategy of staying well under the radar of the majors.
Bonza has mapped out 27 routes to 17 destinations in Queensland, NSW and Victoria. Some 93 per cent of these routes are not currently served by any airline and 96 per cent are not serviced by a low-cost carrier. The Sunshine Coast to Whitsundays route is one of them.
The company’s strategy is aimed at challenging the resurgence of the drive market; a legacy of COVID lockdowns when airlines were grounded.
Bonza describes today’s debut flight as a ‘game changer for both tourism markets as well as friends and family who can ditch the 12-hour drive in place of a direct flight’.
“Today’s milestone flight comes at a time where demand is high for Aussies to explore their own backyard,” says Bonza CEO Tim Jordan.
The new airline, which is backed to the tune of $300 million by US-based private equity group 777 Partners, a specialist investor in low-cost aviation carriers and solutions providers including Canada's Flair, is starting out with three Boeing 737 MAX aircraft. Bonza has another eight on order.
Jordan and his team would no doubt have been buoyed by a strong monthly profit result announced today by Rex Airlines, a result that shows an appetite by travellers for regional routes.
Rex says December was the fourth consecutive month that its regional operations were cashflow positive since its business normalised after lockdowns a year ago.
Rex is forecasting a return to profitability before tax this financial year, while the Bain Capital-owned Virgin is on the same track after the clawing its way back from the brink.
All want a small piece of the Qantas pie, as the airline dominates the skies with an upgraded pre-tax profit forecast of $1.45 billion in the first half of FY23.
However, Bonza is deliberately avoiding the turbulence it would face going head-to-head with the market leaders.
Jordan says Bonza’s aim is to ‘stimulate new tourism markets by serving underserved regional communities’.
“In addition to being home based on the Sunshine Coast, nine of our 17 initial destinations are in regional Queensland and include Gladstone, Bundaberg, Rockhampton, Mackay, Whitsunday Coast, Cairns, Toowoomba Wellcamp and Townsville,” says Jordan.
“Our route map is just the beginning, and our plans are laid out for growth.”
Bonza’s entry to the market also heralds a new era of growth for the Sunshine Coast Airport, which is expected to bring an extra 772,000 airline seats to the region over the next 12 months.
Sunshine Coast Airport CEO Andrew Brodie estimates this to generate an additional $86 million in visitor expenditure annually.
“Bonza’s arrival into the Sunshine Coast is a game changer for our region as we will connect more people to more destinations than ever before,” says Brodie.
“It’s a new era for Sunshine Coast Airport as this inaugural service marks the first of 13 destinations Bonza will service directly from the Sunshine Coast, 10 of which have never been previously offered.
“Our partnership with Bonza is just the beginning as we look forward to a bright future and bringing even more destinations to our airport that will grow employment and tourism and unlock new market opportunities for business to explore.”
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