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“The spirit of Australia”: Rival airlines' actions praised after Bonza collapse

Thousands of passengers were left stranded across the country when budget airline Bonza cancelled all their flights and announced that they have entered into voluntary administration. “Bonza has temporarily suspended services due to be operated today, as discussions are currently underway regarding the ongoing viability of the business,” CEO Tim Jordan said. “We apologise to our customers who are impacted by this and we are working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian aviation market," he later told news.com.au. Rival airlines, including Jetstar, Qantas and Virgin have all stepped in to help passengers and staff affected by Bonza's sudden collapse. Jetstar and Virgin Australia sprung into action when one passenger, <a href="https://www.oversixty.com.au/travel/travel-trouble/not-good-enough-karl-takes-aim-at-airline-cancellation" target="_blank" rel="noopener">Tracy Hilbert</a>, revealed her devastation after her morning flight to Melbourne got cancelled on the day that she was planning to be with her family following her father's passing on Monday. The two airlines helped her get to her destination without charging her for a ticket. Jetstar, which is owned by Qantas, also released a statement on Tuesday and said: “We understand today’s news about Bonza will have a significant impact on many people’s travel plans.” “For Bonza customers who are due to travel today or who are stuck away from home, Jetstar and Qantas will assist by providing flights at no cost where there are seats available.” Qantas also released a statement offering employment support to staff affected by the budget airline's collapse. “We extend our thoughts to our aviation industry colleagues and their families – from pilots and cabin crew to flight planners and operations controllers,” it read. “If Bonza employees would like to discuss recruitment opportunities within Jetstar and Qantas, particularly in specialised fields which are unique to aviation, we’ve set up a dedicated page on the Jetstar careers website. “For any customers with a cancelled Bonza flight on a route we operate, to make sure you’re not further out of pocket, you can fly with us at no cost where we have seats available.” Virgin Australia also extended its hand to staff seeking employment, and offered support to any passengers stranded mid-journey with complimentary seats, where available. “When Bonza started in Australia, we welcomed its launch because competition makes us all better and benefits consumers. We are saddened to hear of Bonza’s current situation and the impacts on its people, customers and partners,” the statement read. “We will do what we can to support Bonza’s employees by prioritising them for any current and future roles at Virgin Australia, and encourage them to contact our careers team at recruitmentteam@virginaustralia.com if they wish.” The three airlines' responses have been applauded by the aviation industry and Aussies alike with many branding it “the spirit of Australia”. Image: Lachie Millard/ news.com.au

Domestic Travel

What just happened to Bonza? Why new budget airlines always struggle in Australia

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/ian-douglas-2932">Ian Douglas</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> and <a href="https://theconversation.com/profiles/seena-sarram-1469656">Seena Sarram</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> The history of budget jet airlines in Australia is a long road <a href="https://www.smh.com.au/traveller/travel-news/grounded-five-of-australias-biggest-airline-failures-20221216-h28pzn.html">littered with broken dreams</a>. New entrants have consistently struggled to get a foothold. Low-cost carrier Bonza has just become the industry’s <a href="https://www.afr.com/companies/transport/bonza-flights-cancelled-as-aircraft-repossessed-20240430-p5fnjf">latest casualty</a>, entering voluntary administration on Tuesday after abruptly cancelling all flights. Losing the airline would be heartbreaking for the 24 regional Australian locations that were <a href="https://www.accc.gov.au/system/files/domestic-airline-competition-report-february2024_0.pdf">not connected directly</a> by any other airline. It would also mean even less competition in a heavily concentrated domestic air travel market. Over 85% of routes are operated by just <a href="https://www.accc.gov.au/system/files/domestic-airline-competition-report-february2024_0.pdf">three airline groups</a>. But Bonza hasn’t just fallen into this situation by chance. Strategic missteps likely played a key role from the very beginning. <h2>What went wrong</h2> First, running an airline is an expensive business – any cost savings airlines can find are extremely valuable. Bonza chose to enter the Australian market with a very small fleet of <a href="https://skybrary.aero/aircraft-family/b737-series">Boeing B737</a> jet aircraft. But these had no operating cost advantage over the B737s already flown by Qantas, Virgin and Rex. Bonza’s small fleet also lacked any scale advantage in scheduling aircraft or crew. Second, to sell tickets, Bonza adopted a radically different “<a href="https://flybonza.com/media/bonza-gets-wheels-up#:%7E:text=Bonza%20is%20the%20first%20airline,uniform%20including%20custom%20Bonza%20sneakers.">app first</a>” approach. The only place customers could search for and book tickets directly was the official Bonza app. But this meant potential customers using conventional search tools – such as search engines or booking websites – often couldn’t find Bonza flights. The fact Bonza <a href="https://www.couriermail.com.au/business/qld-business/gold-coast-airport-sweetheart-deals-raise-concern-for-bonza/news-story/5ecdfe749b7c8a636cfe740ee0359ba3">struggled</a> to gain traction on its routes to Gold Coast airport, which handles a sizeable 250,000 domestic passengers each month, underscores this issue with the company’s approach. And third, although it served a unique range of locations, Bonza’s flight schedule across its network was far from optimal. In some cases, routes were flown only once weekly, compared to much more frequent gateway city services on Rex and QantasLink. For European airlines like easyJet or Ryanair, less-than-daily flights to smaller tourist destinations might be viable. But these airlines have the scale and connectivity to offer customers alternative pathways across their networks. Unlike Bonza, small regional routes are not at the core of their business model. <h2>Making an airline succeed</h2> Bonza isn’t the first Australian budget carrier to fail, and likely won’t be the last. Why are so many new entrants doomed to fail? Making a jet airline succeed hinges on optimising three key factors – market scale, airport access, and geography. For would-be budget airlines, Australia offers a brutal starting ground on all three. Market scale <a href="https://www.icao.int/sustainability/Pages/Low-Cost-Carriers.aspx">Low-cost carrier</a> and ultra low-cost carrier airlines have successfully gained strong footholds in Europe, the US, and Southeast Asia. But these markets are orders of magnitude larger than Australia. The US, for example, offers airlines a market of <a href="https://www.statista.com/statistics/183600/population-of-metropolitan-areas-in-the-us/">large cities across a large area</a>. New York’s population is approaching 20 million, Chicago 9.6 million, Houston 7.1 million, and Miami 6.1 million. The population of the European Union is close to 450 million. And if you include the UK, there are over 30 cities in Europe with populations over 1 million. Australian carriers have only a handful of cities on that scale. Australia lacks both the population density of Europe, and the range of secondary airports that European low-cost carriers have leveraged to access nearby markets and to drive down operating costs. After more than a year of operation, Bonza had only achieved an overall market share of <a href="https://www.accc.gov.au/system/files/domestic-airline-competition-report-february2024_0.pdf">about 2%</a>. Airport access Airport access is the next key barrier facing low-cost and ultra low-cost market entrants. The main routes between large Australian cities are all in a corridor along the east coast, and the largest flow into Sydney. Use of Sydney airport is heavily constrained, both by the incumbent operators who <a href="https://australianaviation.com.au/2023/07/sydney-slot-system-a-threat-to-bonza-owner-hints/">hold most of the slots</a>, and by regulations that artificially limit the flow of aircraft at peak times to just 80 movements (take-offs or landings) per hour. In contrast, London Heathrow, another constrained two-runway airport, delivers a capacity of <a href="https://www.caa.co.uk/media/dwfgyk53/estimating-the-congestion-premium-at-heathrow.pdf">88 movements per hour</a>. Completion of the new Western Sydney Airport will provide some relief from this capacity constraint. But it will not alter the fact Sydney Airport operates under an imposed constraint on operations. Geography Geography is the third constraint in Australia. Unlike Europe, the US, or Southeast Asia, most of our major cities are in a line on the east coast. There is no hub to connect our major cities with smaller regional points. Towns that are too distant for convenient rail or road links often have populations that are too small to support viable – let alone frequent – flights to the larger centres. Some regional routes are successfully serviced by small “<a href="https://nbaa.org/business-aviation/business-aircraft/turboprop-aircraft/">turboprop</a>” aircraft. Operating these incurs a higher cost per passenger than the passenger jets connecting the major cities. But it makes no sense to fly larger aircraft on these routes if the planes are half empty. <h2>A big loss for regional Australia</h2> The combination of Australia’s small population, the capacity constraints imposed on Sydney Airport, the presence of strong incumbent airlines, and our linear east coast market make new entry difficult. Virgin Blue occupied the space created by the collapse of Ansett. But Impulse, Tiger, Air Australia, Ozjet, and two versions of Compass were unsuccessful market entrants. Even Air New Zealand – which has the fleet, brand strength, and market access to support entering the market – chooses not to operate domestically in Australia. Understanding why new entrants fail offers little consolation to underserved regional towns in Australia. But given Bonza’s small footprint, capital city travellers looking for more competition on the major east coast routes will hardly notice a change.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/228995/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/ian-douglas-2932">Ian Douglas</a>, Honorary Senior Lecturer, UNSW Aviation., <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> and <a href="https://theconversation.com/profiles/seena-sarram-1469656">Seena Sarram</a>, Lawyer and Casual Academic, UNSW School of Aviation, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> Image credits: Bonza - PR Image This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/what-just-happened-to-bonza-why-new-budget-airlines-always-struggle-in-australia-228995">original article</a>. </div>

Travel Trouble

"Not good enough": Karl takes aim at airline cancellation

Karl Stefanovic has ripped into Aussie airline Bonza, who cancelled all their flights at the last minute and left people stranded all across the country. One of the travellers who were left abandoned was Tracy Hilbert, who was due to fly out of Melbourne on Tuesday morning to see her family after her father suddenly died on Monday night. However, instead of being with her mother and brother, she instead spent the day stuck inside the airport after a fellow passenger informed her their flight had been cancelled with no warning. Tracy spoke to Karl Stefanovic and Sarah Abo on Today to share how let down she felt by the airline, as they failed to communicate the cancellation with their customers. “I text my husband. He said, ‘yes, it’s been cancelled’ and sent me all the details,” Ms Hilbert told Today. “Then the crew came in and about a 5.45am they said that it’s been cancelled.” Ms Hilbert fought back tears as she told Karl and Sarah the heartbreaking reason why she was so desperate to make her flight. “I’ve actually had my father pass away last night, so I needed to get up there because my brother text me and said that he’s not in a good way.” Ms Hilbert’s husband quickly booked her a flight with the budget airline last night, not realising that as of this morning, services will be “temporarily suspended”. “I’ve never had this problem with them before,” Ms Hilbert said. “It’s only a two-hour flight but now it’s going to take me all day to get up there.” Thankfully for Ms Hilbert, along with thousands of other stranded passengers, Virgin and Jetstar said those who were affected by the cancellation would be assisted to get to their destination. “We are aware of the temporary suspension of Bonza flights,” Virgin posted on X. “We will immediately support any passengers stranded mid-journey by offering complimentary seats on Virgin Australia-operated flights to the airport nearest to their final planned Bonza destination.” While wondering if she would receive a refund for her cancelled flight, Ms Hilbert said she was frustrated with the lack of communication with Bonza, saying, "You can’t talk to anybody, it’s all through emails.” Ms Hilbert said it’s all been “very hard” as she should have been with her mother, brother and other family now. “Oh, sweetheart. Hey, Tracy, we’ll let you go,” Karl quickly responded as Ms Hilbert continued to break down in tears. “Obviously there’s going to be a lot of people who are inconvenienced. You’re inconvenienced in a whole lot more emotional away. And it’s such a big thing for you to be handling right now. And we’re so sorry for your loss.” Karl hit out at the airline saying the very least they can do is communicate with travellers who have been left in the lurch. “It’s not good enough just to say something is cancelled. They might be going through the most, you know, horrible business morning of their lives, but that shouldn’t stop you from communicating with people." “It’s just a basic human necessity. And especially for people like Tracy.” On Tuesday, Bonza CEO Tim Jordan said services will be “temporarily suspended” while discussions surrounding the “viability of the business” take place. Image credits: Today

Travel Trouble

Get packing! A new airline is making it even easier to go rural

Budget airline Bonza has revealed where it will be landing and taking off from as part of its ‘Here for Allstralia’ campaign. Having said it wouldn’t be competing with fellow budget airlines Jetstar and Rex for capital city routes, Bonza announced it would be offering 25 routes across regional Australia. The airline, which was first introduced in 2021, still requires regulatory approval before it can begin hitting the skies, but is expected to take-off from the middle of this year. “Since announcing Bonza to the world late last year, we’ve always said we wouldn’t just fly between Australia’s three largest cities and instead give people in the regions more choice,” Tim Jordan, Bonza’s CEO and former Virgin Blue executive, said in a media release. Mr Jordan said the announcement also came as the “largest” in “Australian aviation history”. “With destinations ranging from Albury to the Whitsundays, travellers will now be able to fly, instead of impossibly long road trips, as well as fly direct without a stopover in a major city,” he said. “Aussies can look forward to spending more time at their destination and spending less of their hard earned cash getting there in the first place.” Bonza has said that 80 percent of the initial route network will be heading to previously unserved locations, opening up air travel to even more Aussies in even more locations. The airline is also opening up its recruitment, offering jobs for 200 pilots and cabin crew who were laid off during the pandemic to work at its Sunshine Coast and Melbourne posts. “It’s hard not to have witnessed the devastating impact of the pandemic on many talented pilots and cabin crew,” Mr Jordan <a href="https://7news.com.au/travel/air-aviation/new-airline-bonza-seeking-200-workers-c-6272113" target="_blank" rel="noopener">said</a>. “It’s our hope we can provide roles and development opportunities to some of those impacted.” With at least 8500 workers laid off or made redundant from Qantas alone and a third of Virgin’s staff cut to avoid voluntary administration, it’s safe to say Bonza will be seeing their vacancies filled quickly. The full list of destinations includes: <ul> <li dir="ltr" aria-level="1"> VIC </li> <ul> <li dir="ltr" aria-level="2"> Avalon </li> <li dir="ltr" aria-level="2"> Melbourne </li> <li dir="ltr" aria-level="2"> Mildura </li> </ul> <li dir="ltr" aria-level="1"> NSW </li> <ul> <li dir="ltr" aria-level="2"> Albury </li> <li dir="ltr" aria-level="2"> Newcastle </li> <li dir="ltr" aria-level="2"> Port Macquarie </li> <li dir="ltr" aria-level="2"> Coffs Harbour </li> </ul> <li dir="ltr" aria-level="1"> QLD </li> <ul> <li dir="ltr" aria-level="2"> Bundaberg </li> <li dir="ltr" aria-level="2"> Cairns </li> <li dir="ltr" aria-level="2"> Mackay </li> <li dir="ltr" aria-level="2"> Gladstone </li> <li dir="ltr" aria-level="2"> Toowoomba Wellcamp </li> <li dir="ltr" aria-level="2"> Sunshine Coast </li> <li dir="ltr" aria-level="2"> Whitsunday Coast </li> <li dir="ltr" aria-level="2"> Townsville </li> </ul> </ul> Image: Bonza

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