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New low-cost start-up Bonza Airlines set to fill void in Australia’s domestic routes, says GlobalData

Author: Theodore Koumelis / Date: Mon, 10/18/2021 - 04:06
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77% of Australian respondents were ‘extremely’, ‘slightly’, or ‘quite’ concerned about their personal financial situation, reinforcing the need for lower-cost air connectivity in Australia.

Australia’s newest low-cost start-up Bonza Airlines will provide vital low-cost competition in a ‘full-service’ dominated market which could expectedly be a disruptive force. 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, says GlobalData, a leading data and analytics company.

Gus Gardner, Associate Travel and Tourism Analyst at GlobalData, comments: “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.

“Although GlobalData figures show that 25 million domestic trips were taken by air in 2019 (pre-COVID-19) across Australia, competition between airlines has remained low and underserved communities have suffered. The new entrant’s strategy to connect underserved airports and target leisure travellers could see the airline become a sizable competitor over the coming years.”

GlobalData’s Q3 2021 Consumer Survey* has revealed that 77% of Australian respondents were ‘extremely’, ‘slightly’, or ‘quite’ concerned about their personal financial situation, reinforcing the need for lower-cost air connectivity in Australia.

Mr. Gardner continues: “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. Operating a low-cost business model will bear fruit for Bonza Airlines. The low-cost base, coupled with expected pent-up demand for low-cost flights, could see the airline quickly become popular.

“Furthermore, 54% of Australian respondents in GlobalData’s Q3 Consumer Survey* suggests that affordability was the top factor taken into consideration when deciding where to go on holiday. Offering low prices will be vital to encouraging travel during the COVID-19 recovery period. Low prices, a favourable network, and no-frills service could see Bonza Airlines thrive.”

With the domestic and interstate travel restrictions beginning to ease and travellers seeking a change of scenery, 2022 is an optimal time for Bonza Airlines to launch.

Mr. Gardner concludes: “COVID-19 has provided an optimal environment to launch. An abundance of attractively priced second-hand aircraft, airport slots, and skilled labor (pilots and cabin crew) means previous barriers to entry have been lowered. Bonza Airlines is likely to possess a low-cost base, resulting in lower fares and the ability to win market share from the competitors.

“Furthermore, a lack of low-cost competition in Australia will see the carrier become popular with budget-conscious travellers. Leisure travel is expected to benefit post-pandemic, and the airline will be favored by those seeking leisure destinations. All factors combined bode well for Bonza Airlines.”

* GlobalData Q3 2021 Consumer Survey, 569 Australian respondents
 

ABOUT THE AUTHOR

Theodore Koumelis

Co-Founder & Managing Director

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.