If all goes according to plan, Australia will see a new domestic airline, Bonza, flying in our skies next year.
The latest low-cost carrier with bold designs on the Australian market, Bonza is planning to start operations from mid-2022. Backed by Miami-based investment firm 777 Partners, founder Tim Jordan, formerly of Virgin Blue, will operate a small fleet of brand new 737-8 MAX aircraft.
According to Mr Jordan, Bonza will focus on the leisure-travel market with all-economy flights from a base either in regional NSW or Queensland.
The ambition is for the airline to connect up to 20 regional cities and major holiday destinations not currently served by non-stop flights. That statement had Qantas CEO Alan Joyce scratching his head and wondering what those routes could possibly be while wishing the new venture the best of luck, possibly with his tongue in cheek.
History is not on Bonza’s side. For most of the 20th century the Australian government maintained a two-airline policy that handed a duopoly to Ansett and Australian Airlines. The deregulation of Australia’s airline industry in 1990 ended that comfy arrangement and opened the door to independent, low-cost carriers, but it’s not been a happy story.
Photo: SIMON RENILSON
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Australia’s first low-cost airline was the brainchild of Bryan Grey, former head of regional carrier East-West Airlines. After its first flight in 1990, the airline lasted just a year, undercapitalised and unable to generate sufficient funds to stay afloat when its competitors slashed their own prices.
Another problem for the infant airline, Compass was forced to operate out of the terminals of its rivals, and given least-favourable treatment. A dispute with the Civil Aviation Safety Authority over the cost of provision of services finally grounded the airline just five days before Christmas, 1991. At the time, it was argued that had the airline been allowed to operate over the peak summer period it would have been on the runway to success.
A second version, Compass Mk II, rose from the ashes in 1992, and flew for just a few months before it too collapsed.
Photo: Dallas Kilponen
Operating a fleet of five Boeing Beechcraft aircraft, Impulse began operations in 1992, offering services throughout regional NSW. That allowed it to gain traction without incurring the displeasure of the two majors, and for a while Impulse was meshed with Ansett’s frequent flyer program.
In 1994 the airline began operating flights between Newcastle and Melbourne aboard a BAe Jetstream 41, but then Qantas sat up and took notice and raised the stakes with a larger aircraft on the same route. That forced Impulse to abandon that particular service, after which Qantas also threw in the Newcastle-Melbourne towel.
In 2000 Impulse went head-to-head with Qantas and Ansett and began operating five Boeing 717s between east coast capitals. After a short-lived agreement with Qantas, which saw the airline market Impulse flights and inject cash in return for an option to buy, Qantas acquired Impulse, which became the basis for QantasLink.
An Ozjet 737 at Sydney Airport after completing its first flight from Melbourne in November, 2005. Photo: John Woudstra
Strictly speaking, Ozjet doesn’t qualify as a low-cost airline, yet in a sense that’s what it was. The Tullamarine-based carrier began flying in November 2005 with flights between Melbourne and Sydney aboard Boeing 737-200 aircraft with 60 seats in an all-business class configuration.
Ozjet was aiming to expand to other state capitals, and carve off a small share of the business-class market from VA and Qantas, selling its seats at about the same price as a full-flexy economy-class fare aboard its competitors. It didn’t work. Within a short time Ozjet were discounting further, and just four months after its first flight, Chairman Paul Stoddart announced the airline would cease all scheduled operations.
We’re affluent, our major cities and holiday hotspots are widely separated and unless you fly, there is no practical way to get speedily from one to another. Until the pandemic struck, the Melbourne-Sydney route was one of the world’s busiest, with Brisbane-Sydney not too far behind. Also, Australia is the largest aviation market without an independent low-cost carrier. These metrics make Australia a tempting proposition for anyone in the aviation industry with access to funds and a little imagination.
You might think therefore that this would be prime ground for a low-cost start-up but time and again those who have tried have fallen on their face. Start a new route that proves viable and Qantas or Virgin Australia will muscle in. Offer ultra-low cost fares and the two majors will sacrifice revenue to undercut your prices, and they can hold their breath for a lot longer than you can. And they offer tempting frills such as frequent flyer loyalty points and partnerships with international carriers that help shore up a loyal customer base.
Qantas in particular has the ear of the government, and although Australia has long since abandoned its two-airline policy, that’s what it has facilitated. If they don’t drive you to the wall, one or the other airline will open their mouth and swallow you whole.
Rex is an exception. Now serving all six states, the Mascot-based airline began in 2002 as a regional carrier, started by former Ansett employees who welded together Hazelton and Kendall airlines. Over that time Rex has morphed into a serious player with its own flight school, operating a handful of Boeing 737-800s and the world’s largest Saab 340 fleet. Having weathered the slowdown of the pandemic, now offering flights between Melbourne, Sydney and Brisbane, Rex looks like a stayer, although by its own admission it’s not a low-cost carrier.
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