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Rex’s Sharp says Bonza too optimistic on launch timeline

written by Hannah Dowling | November 12, 2021
One of Rex's latest 737s, VH-REX, as shot in Melbourne YMML by Victor Pody
One of Rex’s latest 737s, VH-REX, as shot in Melbourne YMML by Victor Pody.

Rex deputy chairman John Sharp has shared his doubts that budget airline Bonza will be able to pull off its claimed launch in early 2022 – if at all.

Speaking at an online event on Wednesday, Sharp argued that Bonza is still in the process of obtaining its Air Operators Certificate from the Civil Aviation Safety Authority – a process that he says, often takes in excess of 12 months.

Bonza founder Tim Jordan told Australian Aviation earlier that CASA was first flagged of Bonza’s impending launch in October 2020, which, according to Sharp, means the new airline could fall short of its planned inaugural flight in Q2 2022.

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“Bonza is claiming that they will be in operation early next year – that’s only three months away,” Sharp told the Future Flying forum.

“And yet to do that, they’ve got to get a high-capacity air operator certificate, and you won’t get that in under 12 months – if you can do it in that time. And so, their start date I don’t think is ever likely to occur.”

However, optimistic timeline aside, Sharp appeared unenthusiastic that Bonza will make it off the ground at all, in light of the fate of similar potential start-ups.

“I’ve been in this game a long time,” he said.

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“And during that time, every couple of years, somebody would come forward. Usually, they’re former employees of an airline or they’re a group of pilots who come together who reckon they can run an airline better than the management team.

“So they come together, they put a plan together. It sounds great, they are very confident. They make lots of publicity, and then the reality of the situation dawns on them and they just quietly disappear.”

Like many who hear Bonza’s ambitious intentions to tap into underserved regional markets with its fleet of Boeing 737 MAX jets, Sharp questioned what routes Bonza could possibly be considering that the incumbent airlines don’t yet focus on, that can handle a 737, and that have adequate demand to sustain a new market entrant.

“That’s a mystery to us … what are those markets? If they are worth servicing, Qantas, Virgin or Rex would be in there doing it,” he said.

In response to public criticism about Bonza’s proposed business plan, including its choice to service regional routes on a 737, Jordan told Australian Aviation last month that he is far from worried.

“The most wonderful thing is that we live in a free market economy, whereby we can all have our own individual opinions which is fantastic,” he said of the backlash.

“In terms of Bonza, our major investment partner is 777 Partners, which is a private investment firm based in Miami, and they have assets under management of just under US$6 billion.

“777 Partners are not private equity – they invest for the long term. In fact, they have never exited one of their investments,” the Bonza CEO explained, adding that the investment firm has “got deep pockets”.

“So I think that puts us on a very firm footing in terms of what we’re executing in the market.”

“I think as people pull back the layers in terms of what we are about, in terms of our strategy, in terms of our owners, and in terms of our management team, I think people will have a better understanding of how positive this can and will be across Australia,” Jordan concluded.

5 Comments

  • Warwick

    says:

    This coming from a former pollie who decided to ‘start up’ flying Boeing 737’s on the ‘golden triangle, in the middle of a pandemic.

    He should be looking to his ‘own backyard’ firstly, where his airline REX lost $18.5mn FY 20-21, & loss of over $27mn FY 19-20.

    And we all know he hates ‘competition’, & thinks Rex has a ‘god given’ rights to be the only airline flying some routes’.

    Less see how he goes on the main trunk routes, & also with a bit of ‘Bonza’ competition.

  • Rod Pickin

    says:

    Hey Mr. Sharp, with due respect, there is a swag of observers out there that hold the same opinions about your perceived direction of REX too. Current evidence indicates that the introduction of more airlines and or the expansion of same eg. REX/B737 ops in competition with the existing operators is, at this time, not a smart move but our system of business governance doesn’t permit a quiet fireside chat with the proposers in order to achieve a better outcome for investors and subsequently the people from all arenas supporting the intended enterprise. To me, never a better time to reintroduce some regulation to the industry to further expand and protect it’s operations into the future. At this time, just because we can expand as and when, doesn’t make it a smart move. Time will tell.

  • John Raby

    says:

    With all due respect Mr. Sharpe is not correct in his observations regarding the time needed to obtain a high capacity AOC.
    The essential elements are good people with the experience and skills to build a credible and safe operation supported by sound management, first class equipment and support services.
    We started the serious work on building Virgin Blue flight operations in early March 2000 and flew our first revenue service in August 2000.
    All achieved in roughly 6 months.
    There were many naysayers who did all they could to put roadblocks in our way but it is now a matter of record that we grew exponentially to replace Ansett and build the foundations of a great Australian airline, the present day Virgin Australia.
    Good luck to the team behind Bonza. True competition builds better services for the public benefit.

    • Rod Pickin

      says:

      Hi John, as an observation, not a criticism, I seem to remember that when setting up Virgin Blue the needs of an AOC by all accounts were close to the bottom of the “To do” list and it was only when this was identified at an interview with Sir Richard things happened very quickly and clearly professionally. I do agree with you that competition is great but we must realise that ideology and practicality particularly in our aviation market leaves a nasty void space when deregulated ops are allowed unchecked. At this time one or more of the intended “players” in our market may not survive into the future leaving a deficit legacy of hundreds of millions of dollars; would you invest your capital in such an enterprise? I think not. Watch this space seems appropriate.

  • Simon Hawkins

    says:

    Sharp’s sole purpose is to bad mouth any and all competition. He did it with great effect when Virgin was restructuring, ever the dodgy old politician. How about you focus on making sure your Saab’s are airworthy mate, don’t want to miss out on any of those heavily subsidised regional routes you love flogging your wares to.

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