When Bonza’s chief executive Tim Jordan launched Kazakhstan’s first low-cost airline FlyArystan in 2019 he upset the local taxi drivers by charging lower fares than an alternative six-hour road trip to a regional centre. With fares starting at US$13 it is little wonder and within 10 months of launching with just two planes, the airline had carried over 1 million, mostly first-time flyers, with a load factor of 93 per cent - above what any Australian airline achieves. The same formula is coming down under with Australia’s first ultra-low-cost airline, announced this week, set to upset more than just taxi drivers. According to London-based GlobalData’s Travel & Tourism analyst Gus Gardner, Bonza will be a major disruptor “as competition between airlines has remained low and underserved communities have suffered.” “Bonza Airlines will provide the vital low-cost competition in a full-service dominated market which could expectedly be a disruptive force,” Mr Gardner said. “The new entrant’s strategy to connect underserved airports and target leisure travellers could see the airline become a sizeable competitor over the coming years.” Growth is certainly on the radar with Bonza’s backer Miami-based investment company 777 Partners increasing its order for 737s from 24 to 38 in the past few months with 60 options. 777 Partners aviation investment principal and Bonza executive chairman Rick Howell telling AirlineRatings.com that it is focused on “long-term value creation through clever people who can take advantage of missed or unloved opportunities.” Bonza’s business model is similar to US ultra-low-cost airline Allegiant Air which has perfected serving routes which other airlines ignore. Allegiant only faces competition on 18 per cent of its 518 routes that cover 129 destinations across the US. In Australia, Mr Howell says that at “least half the routes Bonza will fly have no competition and none will have a low-cost competitor.” Bonza’s model also mirrors Europe’s giant ultra-low-cost Ryanair which has opened up many airports that are no more than 2000m of concrete in a sunflower field and in the process become Europe's largest and most profitable airline. There are a host of routes and centres in Australia that are ignored for jet service. For instance, the only service from South Australia to Western Australia is Adelaide to Perth. Towns such as Broome, Exmouth, Kununurra and Busselton/Margaret River could easily support seasonal weekly direct services to and from Adelaide if the price was right. Aside from Pt Hedland, Kalgoorlie and Karratha for FIFO, Victoria is only connected to Perth, Broome and soon Busselton/Margaret River, while NSW is connected to just Perth and Broome from Sydney for leisure travellers. READ: Qatar gets green light for UK flights READ: New technology tracking of MH370 to start.  SEE: Geoffrey Thomas discusses Bonza's launch There are dozens of route combinations that offer tantalizing possibilities but one limiting factor could well be on ground hotel capacity. Mr Jordan told AirlineRatings.com that the airline is now “talking with 40 airports across the country” and interest is high.

Rather than an impediment COVID-19 has presented Bonza Airlines with a prime opportunity to get launched with the current situation aiding its expansion plans of filling the void in the Australian air routes, Mr Gardner said. “Bonza Airlines is well-positioned to fill the void left by Tigerair’s exit and will place pressure on incumbent players, Qantas Airways and Virgin Australia. “There is a gap in the market for a new low-cost carrier, and Bonza Airlines fits right in,” Mr Gardner said. Bonza’s promised ultra-low fares will be the right fit for tighter household budgets with GlobalData’s Q3 2021 Consumer Survey revealed that 77 per cent of Australian respondents were ‘extremely’, ‘slightly’, or ‘quite’ concerned about their personal financial situation. “The launch of a new low-cost carrier will be met positively by those looking for cheaper travel options. COVID-19 has placed a considerable strain on the travellers’ budgets and the desire to escape on vacation has risen considerably. “The low-cost base, coupled with expected pent-up demand for low-cost flights, could see the airline quickly become popular. However, it will not be a dream run with the Qantas Group and Virgin Australia expected to reassess more routes they had previously ignored. Responding to closed international borders, over the past 18 months the Qantas Group has added 45 new domestic routes including Perth to the Gold Coast, while Virgin Australia has added 12 new routes including Perth to Hobart and Launceston. Qantas has also added capacity with a lease deal with Alliance Airlines for 18, 94-seat E190 jets to serve regional centres, while Virgin Australia is bringing in nine more 176-seat 737s. At stake is market share with Qantas chief executive Alan Joyce stating 70 per cent is the line in the sand with Virgin’s Jayne Hrdlicka wanting 35 per cent with Rex and its six 737s getting virtually nothing. That line has been crossed because the ACCC’s fourth Airline Competition in Australia report revealed that the Qantas Group’s share of total domestic passengers fell from 74 per cent in the December 2020 quarter to 69 per cent in the March quarter. According to The Centre for Aviation’s founder Peter Harbison there is going to be a “long period of readjustment” in the domestic airline market. He sees all players flooding the market with the capacity to secure market share with resulting low fares. “Passengers will be incentivised by price - particularly in the first six months after lockdowns are lifted,” Mr Harbison said. “It will be quite a while before we get stability into the market.”