New Australian airline Bonza took to the skies on January 31, 2023, with the goal of dynamizing a market that, over the last decade, has seen competition falter and the two main airline groups gobble up more than 90% of the domestic market.
This startup carrier offers the traditional low-cost formula of cheap fares and a basic no-frills experience with added à-la-carte services. But it also aims to differentiate itself in a number of other ways, from an app-only booking process to the fresh and youthful vibe it projects.
Bonza, which in its first 12 months of operations has carried more than 750,000 passengers, has deliberately avoided Australia’s trunk routes to focus instead on under-served markets across the eastern half of the country.
As such, this was a perfect time for AeroTime to speak with Bonza’s founder and CEO, Tim Jordan, to learn more about this venture and what it has in store for the months to come.
Before starting Bonza, Jordan had a long and global career in the airline industry. In fact, launching a new airline was nothing new for Jordan.
Between 2018 and 2020, Jordan helped set up FlyArystan, the low-cost airline of the Air Astana Group, Kazakhstan’s flag carrier, which has since become the largest budget carrier in that geographically vast country.
Jordan started his aviation career in the United Kingdom in 1990, working for Novair, a British charter operator. Then, at the age of 27, he moved to the United States to join United Airlines at its head office in Chicago.
“I started in this wonderful industry in 1990 in the UK. That was my baptism into this wonderful industry and, despite my best efforts, I haven’t been able to escape to this point,” he said.
“I think I’m going to be in this industry for life,” Jordan joked, recalling those early days. “Then I moved to United and it was the start of Star Alliance, so that was a fantastic time to be there, to be involved in the infancy of the alliance industry.” [United Airlines was one of the founding members of Star Alliance in 1997. Star Alliance was the first of the three major airline alliances to have been founded – ed. note]
At United Airlines, Jordan was in network planning. He said he still considers himself a planner at heart, but later experiences took him into other areas of the airline business.
Following a relatively short stint as an aviation consultant at PwC in London, Jordan headed to the other side of the world. In 2002, Jordan joined the Australian branch of Richard Branson’s airline empire, Virgin Blue (later to be renamed Virgin Australia), eventually becoming its Head of Commercial.
His next project would take him slightly further north, becoming Chief Commercial Officer at Cebu Pacific, an ultra-low-cost carrier based in the Philippines, a position he held between 2005 and 2008.
It was immediately after Jordan returned to Australia from the Philippines that the idea of what would become Bonza was first seeded.
“Bonza is the outcome of a passion. It has taken 14 years to get to this point. After returning from the Philippines, I was standing on the veranda at my house, halfway between Sydney and Brisbane and I saw an aircraft fly overhead. I realized that many in my community, my street, my neighborhood, couldn’t afford to get on the aircraft that had just flown over my head,” he said.
“We had just managed to execute very, very well with Cebu Pacific and had grown the market tremendously in the Philippines and enabled many millions of people to fly for the very first time. And here we were, in rich Australia, where the same opportunity wasn’t available to many of my neighbors, and that was where Bonza was born. It just took a long time to get to where we are today – 14 years!”
A market ripe for disruption
The startup capital came mostly from 777 Capital Partners, a US investment firm that, in addition to having backed Flair, a Canadian low-cost airline, has interests in a number of professional sports teams across Europe and Latin America.
“They are here because they could see the opportunity, they could see that Australian aviation was missing something,” said Jordan of his venture partners. “Australia was the only domestic market of the world’s 15 largest without an independent low-cost carrier. You may have low-cost airlines that are owned by a flag carrier, but having independence to fly where and when you like, with the pricing you like, is a very different proposition.
“Australia was missing out and consumers were missing out. Bonza seized an opportunity that existed in Australia. [777 Partners] were already executing something similar in Canada with Flair, so they got it. They came along and they’re with us now on this journey.”
Australia currently has a market structure in which the two airlines of the Qantas Group, Qantas and Jetstar, carry more than 60% of passengers, with Virgin Australia, which is owned by US firm Bain Capital, has another 33%. The rest of the market is covered between smaller regional carrier REX, and Alliance Air, which mostly serves mining locations.
Briefly, Australia had another low-cost carrier, TigerAir Australia, but it was acquired by Virgin Australia back in 2013. And while Virgin Australia started out as a low-cost operation, Jordan, who worked at the airline in its early years, does not consider it to be a true low-cost carrier anymore.
“For all intents and purposes, Virgin Australia has morphed into a full-service carrier. It now has a business class, frequent flyer points, etc.,” he said, explaining the rationale for launching a proper budget carrier in the country. “Australia has spent 10 years effectively without an independent low-cost carrier and that manifests itself.”
Jordan shared some figures to prove his point.
“I’ll give you a couple of my favorite statistics, showing you how Australia has stood still,” he said. “In early 2020, the number of low-cost operated routes in Australia was 58, zero growth. Can you imagine anywhere else in the world where, over a 10-year period and in a growing country, the number of low-cost routes just stood still? This is the Bonza opportunity.”
Jordan wanted Bonza to be more than just another airline with lower prices. He hoped it could bring about a new way of doing things, starting with its name and market positioning.
“If you actually look it up, Bonza is a colloquial Australian term, it used to be used more widely, but what it means is great, well executed…something’s ‘bonza’, mate!”
Jordan highlights that Bonza is intended as an airline for everyone, something that’s reflected in its motto: ‘Here for Allstralia’.
“We wanted to come into the market and say we are proudly Australian, we are proudly doing something different, we are a low-cost carrier and carry everybody on board.”
He continued: “84% of the 38 routes we are currently operating are unique to us. This means that we carry on board people from all walks of life, from first-time travelers to mums and dads, holiday makers and business people, because our route network is quite unique. We like to say we are for the many, not the few.”
On its website, Bonza states that during its first year of operations it has saved Australian travelers more than A$138 million (US$90 million), when comparing its fares with those which would have been available on other airlines on the same itineraries on a connecting basis. The goal this year is to bring those savings up to A$200 million (US$130 million).
“Our competition is the TV or the couch at home. It really is a case of stimulating the market,” Jordan said. “Train travel is not a big thing here. The car is for shorter markets, although people here go on long, long drives, so the car is certainly some competition. But the sofa at home is just as much competition, because people don’t travel if it becomes too hard, too complicated, too costly or too time-consuming, and that’s what we’re changing. People start to realize that you can get on an aircraft for A$50-60 dollars, fly for an hour and go see your relatives.”
Bonza has so far stuck to under-served markets, opening up new connections to secondary airports across Australia and staying away from the most transited routes linking the main cities of Sydney, Melbourne and Brisbane with each other.
“It’s got nothing to do with specific cities, it’s about whether a route is either unserved or under-served,” Jordan said. “Of the initial nine markets that we served, seven are not flown by any other airline. Even a metropolis of five million people like Melbourne has markets that are not flown by any other operator, because their business model would rather have traffic flow through their other hubs. So, we find ourselves servicing many of those regional destinations by default.”
To illustrate this point, Jordan shared a personal anecdote. “I have just flown to Melbourne from a place called Port Macquarie, which has a population of around 100,000 people. Qantas flies to Port Macquarie (PQQ) four times a day from Sydney, with a [De Havilland Canada Dash 8] Q400 aircraft and Rex, three times a day with a Saab [a Saab 340 turboprop aircraft – Ed. Note]. So, we fly from Port Macquarie to Melbourne thrice a week, with fares from A$69, and it takes 1.5 hours, which is approximately 20 minutes longer than the Qantas and Rex service to Sydney, where you would have to connect and take another 90-minute flight to Melbourne. So, we basically cut the journey time and the fares in half.”
Bonza’s business case has been strengthened by what Jordan described as “accelerated regionalization” in Australia.
“There’s been a lot of people, I think all of us to a certain degree, who have questioned our own existence since COVID. We’ve said, ‘I need to strike the right work-life balance’. For many people this has involved moving out of the city and into the countryside, moving to the regions, moving to the beach. This just accelerated the opportunity for an airline like Bonza. That’s what we are seeing.”
Asked why other carriers are not taking advantage of this trend to the same degree, Jordan was categorical.
“Well, 58 [low-cost] routes in 2000, 58 routes in 2020. I’ll let you answer that,” he said.
The Bonza way
While Bonza follows the classic low-cost formula, Jordan is particularly proud of some ‘firsts’ that set his airline apart.
One of them is the fact that Bonza is a truly mobile-first, app-centric airline. In fact, customers can’t book a flight on the airline’s website, they must go to the app. Bonza does still work with some travel agents, but more than 95% of its bookings come through the app.
Bonza has also done away with trolleys onboard its aircraft. You can order food and drink from your seat via a QR code, which brings the menu up on your phone, but the crew then delivers directly to your seat. “Your elbows and knees are now safe from the trolley,” Jordan said with a laugh.
In any case, with or without trolleys, all food and drink that passengers are served is Australian-sourced.
“We don’t even have any of those popular soft drink brands, everything is sourced locally. We try to support local manufacturers, local producers. Some are very, very small,” explained Jordan.
The crew uniform policy, in turn, is ‘wear it your way’. Bonza doesn’t have strict uniform mandates. There is a set of uniform options – trousers, shorts, T-shirts and so on – but the crew get to choose exactly what they would like to wear. They can ‘mix and match’, so there’s not just one standard uniform.
“They can even wear a pair of our Bonza-branded sneakers,” Jordan pointed out, while explaining the sort of corporate culture he wants to instill at Bonza.
“We are trying to represent everybody,” he continued. “We have recruited crew members who have 20 and 30 years of experience with other airlines and then we have also recruited people who are totally new to the industry. That has resulted in a wonderful mix of enthusiasm and experience on board and that’s something that is resonating incredibly well with our customers.”
Apparently, this casual vibe extends to aircraft as well.
“We have Shazza, Bazza, Sheila, Malc, Matilda and another aircraft that is yet to be named. We name our aircraft to bring them alive,” explained Jordan, clarifying that the Bonza team doesn’t like to refer to aircraft by their registrations.
“We found it was a little bit impersonal,” he added with a smile.
The North American connection
Bonza currently has six Boeing 737 MAX 8 in its fleet, two of which are on loan from Flair, investor 777 Partners’ other airline. These two aircraft, which unlike the others are not named, are recognizable not just because of their registration (C-FLKC and C-FLHI) but also because they have retained some elements of the Flair color scheme, such as lime green engines and winglets.
Jordan confirmed that the two loaned aircraft will eventually go back to Canada, but that Bonza is eventually going to get more aircraft from an order placed by 777 Partners in 2019 for 66 Boeing 737 MAX 8 aircraft.
In July 2023 it was reported that the Miami-based investment firm was considering ordering additional aircraft from Boeing, but so far this has yet to be confirmed
Jordan said: “There will be additional aircraft which will take the fleet to either nine or 10 aircraft by the end of the year [2024]. The final number will be dependent on the delivery schedule. This may not be the final number of aircraft, though. The market will tell us.”
If two Flair aircraft have been sent to Australia for ‘hibernation’ during the harsh Canadian winter months, the reciprocal movement may take place after Bonza has received more aircraft.
“It’s not possible for us to send aircraft north this summer, since we will only have six aircraft, of which one is a spare,” Jordan said. “However, our intention is to make this arrangement absolutely reciprocal, since it can benefit both airlines.”
He explained that Bonza hasn’t seen any consumer backlash against the MAX following the Alaska Airlines door incident. Indeed, he had only positive words to say about the aircraft type.
“The MAX has been performing very well for us, both from a fuel burn perspective and as far as customer feedback is concerned,” he said. “For example, the onboard overhead bins: we have not had a single issue with customers not having stowage space on board the aircraft, which for a low-cost carrier is actually pretty unusual.”
Bonza operates its MAX fleet fitted with 186 seats, rather than the 189 that is common on European low-cost carriers. These aircraft were originally assigned to LOT Polish Airlines, and they retain the original configuration with which they were fitted.
Jordan dismissed reports that emerged in industry media about Bonza having difficulties hiring pilots in the current tight labor market.
“It’s not too bad, in part because of the locations of our three bases: the Gold Coast, the Sunshine Coast and Melbourne. These are very desirable locations. The Sunshine Coast and the Gold Coast are about 100 kilometers from Brisbane, but they are a world away in terms of livability. That is almost a unique opportunity for wonderful professionals to further their career flying with the youngest airline in Australian skies and with the youngest fleet and very close to where they want to live,” he said, while confirming that the airline is currently evaluating options for opening a fourth base in the near future.
While its network is entirely on Australia’s eastern side, Bonza is also looking at opportunities to grow in Western Australia, the huge but sparsely populated state that covers almost half of the island continent.
When asked about his options for network growth expansion, Jordan said: “On the day we were announced to the world, October 12, 2021, we sent out about 45 letters to all MAX-capable airports in Australia asking whether they would like to have Bonza service. Those markets that we currently service, 21 of them today, are the most enthusiastic of those airports. Ironically, the only city we have pulled out from is my hometown, Coffs Harbour, which is already not lost on me.”
What we’re not likely to see any time soon is Bonza going international. It’s not just that the opportunities to grow internationally are geographically constrained, but also that Bonza doesn’t want to add complexity when there are still opportunities aplenty within the domestic market.
“The opportunity we see domestically says that we should not do that in the short to medium term, but we should never say never,” stated Jordan.
Instead, he said he was insisting on keeping things simple for now. For example, at present Bonza is sticking to a relatively basic price structure, rather than offering multiple types of fares and service packages as other, larger and more consolidated low-cost carriers are doing.
At this point Jordan resorted to a metaphor: “Our focus has been, if you like, building the house, building the framework. As we go through 2024, our focus is about making this house more beautiful. There are lots of initiatives that we know we have to execute and lots of things that we consider to be fantastic examples in our industry and that we can happily look around the rest of the world and copy. So, we will be looking to execute some of the simple wins, the low hanging fruit, to be quite honest. We are one year old, and we have been finding our place, learning to walk.”
Bonza is experimenting with some services, though. For example, it offers a limited form of complimentary inflight entertainment (IFE) onboard its aircraft that allows passengers to stream some content on their digital devices, although for now there’s no internet connectivity. Jordan admits this is not yet a fully developed offering.
“I don’t think we’ll be competing with Emirates anytime soon in terms of onboard video choices,” he said.
He went on to explain that he sees this technology as a tool that allows the airline to assess consumer preferences with a view to offer more services through this digital channel at a later date, such as, for example, selling services that passengers can enjoy on the ground when they reach their destination.
The airline has also launched a holiday package business in partnership with specialized operators.
“We like holidays and believe there is an opportunity in the Australian market. When you look at the markets that we will be servicing, there is a lot of leisure focus. That’s growing, clearly, from a small base, but we are quite enthused about the opportunity to offer accommodation and flights together,” he said.
While Bonza is not yet profitable, Jordan is unambiguously optimistic about the road ahead.
“I don’t think there would be any airline in the world with six aircraft that is profitable and we’re not bucking that trend,” he said. “But what we can say is that our break-even point is a lot lower than what many people would have you believe.
“Another unique thing about us is that our overhead is incredibly low, and, with the exception of our flying team, we are all virtually based. We are one year old, and we have just gone through the fastest and broadest aviation ramp-up in Australian aviation history.
“The network growth that we have delivered, that the team has delivered over the past year, is extraordinary,” he concluded.