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Exclusive: Bonza won’t deal with airports that don’t negotiate fees

written by Hannah Dowling | February 16, 2022

Start-up budget airline Bonza is prepared to walk away from airports that don’t come to the negotiating table on fees, according to CEO Tim Jordan.

He said the charges are the “single largest cost” for airlines, and airports that want to benefit from Bonza’s low-cost leisure customers will need to be competitive.

Jordan was speaking exclusively on a special episode of the Australian Aviation Podcast, which you can listen to above, where he gave more details on the airline’s previously secret plans to operate on routes currently not serviced in Australia.

It comes just one day after Bonza formally revealed its initial network, which includes 25 routes across 16 destinations in Queensland, NSW and Victoria. The airline also announced that it will be jointly based out of the Sunshine Coast and Melbourne airports, with its initial fleet of five brand new Boeing 737 MAX jets.

“I don’t think there’s a realisation out there amongst the public as to how much it actually costs for you to have the pleasure of walking through an airport,” Jordan said.

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“What I can say is that all of the destinations that we announced yesterday, they get it. They get the fact that we’re doing something very different in the Australian marketplace.”

Jordan said that the commercial agreements negotiated between Bonza and airports are crucial to Bonza’s ultra-low-cost base and will therefore be crucial to whether or not the carrier will opt to fly to those airports.

“Really low fares don’t happen under the off-the-shelf pricing of airports, and we can’t work with that level of pricing for our business model.

“So yes, we have an intention of going across the country, in terms of serving all states in all territories, however, the onus is on the airports to get necessary pricing to support price-simulated travel.”

“If there’s a capital city with an airport that’s going to say, ‘Well, our pricing is our pricing, bad luck, take it or leave it’, I actually think that those communities will be pretty unhappy with those airports.

“Because they’re going to miss out on what will be price-stimulated travel. And that’s really great for tourism, and markets into and out of those particular cities.”

Jordan said if airports won’t drop to a competitive level, that “it would be wrong” for Bonza to operate there, “knowing that we’re going to fail”.

“If we can’t get the necessary pricing model, we’d rather not do it. We can deploy it elsewhere. We’re not short of choices.”

Jordan noted that nearly all of the 46 airports that Bonza reached out to ahead of its grand unveiling last October responded, however, did so with differing levels of “enthusiasm”, which made an impact on which routes the carrier plans to start operations with.

One notable exclusion from Bonza’s initial route network is Sydney, with Jordan stating that slot rules and allocations in Australia’s largest airport being an “added complication” for Bonza.

“I think that’s an impediment for new entrants like ourselves, for sure. So that is a consideration, and it’s a consideration which isn’t a factor in essentially the rest of our network, to be quite honest.”

However, Jordan noted that his airline is “here for all of Australia” and will therefore need to be operating to and from Sydney at one point in the future.

“I would fully expect us to introduce some purple into Sydney, if we can get the right commercial terms, and if we can get the appropriate slots to match those commercial terms,” he said.

Catch our full conversation with Bonza CEO Tim Jordan on the Australian Aviation Podcast, out Thursday.

Comments (13)

  • Timothy Williams

    says:

    I presume that Adelaide does not exist, as far as ths start up airline is concerned – very disappointing!!!

  • teiemka

    says:

    Even after them unveiling the initial routes still not clear how the business case stands up.
    They’ll have to survive 3 years to get any slots in Sydney when WSA opens.

  • Rodney Long

    says:

    Sounding unreasonably arrogant for and airline without aeroplanes, staff, anything.
    “No shortage of choices” of routes? Really?

  • Warwick

    says:

    As if airport bosses’ will take notice of Bonza!

    They pay the fees’ applicable, or don’t have access to the airports’. Simples!

    Trying to come up ‘tough’ in this circ is Bonza’s first mistake.

  • Nicholas

    says:

    Makes you laugh, a start up that is not likely to last and already we get the hairy chested same old same old Low Cost Carrier rubbish..

    Not exactly in a strong negotiating position…

  • Zlarin

    says:

    Gold Coast Airport obviously is not conducive to negotiation as it has missed out on the initial list. A pity as it represents the 6th largest market in Australia with lots of outgoing flights to regional areas missing.

  • dfj

    says:

    Commercial airports are essential pieces of public infrastructure and should be government owned and operated with fixed fees.

  • Much as I wish BONZA well in its endeavours, taking airports head on is not a good move at all. They must remember, airports, like every other business in Australia in this pandemic, have lost shed loads of income, and while welcoming a new airline to their airport, would only do so , if there is a profit in it for them. So negotiate sensibly.
    I believe quite a few of the airports that BONZA intend to fly to, would not operationally be capable of a 737MAX aircraft. Hope they have thought this area through.
    They must realize too that QF/VA/JQ and ZL will not take their entry into the market kindly…let battle begin!

    • Vannus

      says:

      Max, you’re 100%correct in what you say.

      For a ‘start-up’ airline to begin with a ‘demand’ to airport bosses’ is a leap too far.

      Bonza’s really going to be up against the well established airlines, so it’ll be interesting to see if they start, & if they’ll be successful.

  • Matt

    says:

    I don’t think Bonza has any idea what it costs an airport for the privilege of having a Bonza passenger walk through the terminal.

  • Peter Uziallo

    says:

    Bonza, (part of an American owned investment firm – 777 Partners) is acting like the typical price making corporate by putting pressure on airports to reduce their charges. They are behaving like the large supermarkets by squeezing their suppliers. What is next, pressure on the government to reduce air navigation charges? Making out they are doing the airports, tourism and the general public a favour – give us a break, the arrogance!

  • Daniel

    says:

    “how much it actually costs for you to have the pleasure of walking through an airport”? Talk about an over-simplification. So where would Bonza land their aircraft if airports didn’t invest hundreds of millions of dollars in fixed infrastructure, such as runways and taxiways, terminals and parking facilities. Will Bonza land their aircraft on a separate (cheaper) runway? Of course not. So why should an airport allow Bonza to use the same infrastructure as other airlines (that in most cases deliver far more passenger volume to an airport) at a fraction of the revenue? The reality in Australia (and most countries) is that airlines don’t pay the published charges at airports anyway. They negotiate very significant discounts in long term pricing agreements with airports. Tim Jordan is putting pressure on airport charges because he sees that as a lever he can actually pull to reduce costs. Will the aviation fuel companies give him free fuel? Can he pay below award wages for staff? Can he lease his aircraft for nothing? (no, but there are a lot of surplus planes at the moment so Bonza probably did get a good leasing deal, for now).
    Many of the routes that Bonza are proposing to operate are not served by existing carriers because they simply don’t stack up economically, particularly with the aircraft type that Bonza plans to operate. Saving a few bucks on airport charges is not going to make you profitable if your plane is only 40% loaded.
    Any business model that relies on your key suppliers having to sell you their product at a loss for the long term is doomed to fail.
    I give Bonza less than 12 months.

    • Vannus

      says:

      Truly said, Daniel.

      Arrogance gets bosses’ nowhere in today’s business climate.

      Think of the revenue lost by Rex because it its’ DCEO’s, ex-pollie, big mouth always flapping against QANTAS any opportunity he gets.

      I give Bonza 6 months’, at the very least, & that’s if they ever get off the ground in the first place!
      Then all the blame will start, as they’ll not take ownership for the circumstances’.

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