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Bonza collapse could wreak havoc on regional connectivity: ACCC

written by Jake Nelson | May 21, 2024

Dave Parer shot Bonza’s 737 MAX 8, VH-UJK ‘Sheila’, on the ground in Townsville.

Regional passengers will face fewer options for direct flights if Bonza’s administrators are unable to save the airline, the ACCC has warned.

The stricken low-cost carrier had “played a key role in connecting regional hubs across the domestic network”, the competition watchdog noted in its latest Domestic Airline Competition in Australia report, as it tried to stimulate demand on routes not served by other airlines.

Before entering voluntary administration at the end of April, Bonza served 37 domestic routes, 35 of which were to regional destinations and 30 of which were not covered by any other carrier. The ACCC’s figures show that Australia saw a net increase of 22 domestic routes from March 2019 to March 2024, with a total of 178 as of that month.

“Since Bonza began operations, travellers benefited from more affordable airfares and the convenience of direct connections to various regional and holiday destinations otherwise not offered by other airlines,” ACCC Commissioner Anna Brakey said.

“While Bonza’s impact on competition had been limited to date, its presence represented an opportunity for greater competition to emerge in the highly concentrated domestic aviation sector.”

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According to the ACCC, Sunshine Coast Airport (Maroochydore) and Gold Coast Airport (Coolangatta) are seeing the most disruptions following the suspension of Bonza flights.

“Maroochydore Airport, where Bonza was based, would see direct connections reduce from 14 to three routes and Coolangatta Airport would see the number of direct connections halved,” the watchdog said.

“Due to its small fleet size and exclusion of the busiest domestic routes from its network, Bonza had been unable to capture more than two per cent of the passenger market and competed with other airlines on just seven of its routes.”

A map of new and cancelled routes on the domestic air passenger network between March 2019 and March 2024. (Image: ACCC)

A source last week told Australian Aviation that Bonza was seeing average load factors of around 70 per cent across its network, numbers which they claimed were trending upwards.

“Bonza’s average fares were nearly 30 per cent higher over March-April 2024 than the same period in 2023. In addition, forward load factors were showing significant year-on-year increases of 10-20 per cent for the period of May-August 2024, demonstrating very significant growing demand for the low-cost carrier services,” they said.

“In preparation for May this year, the airline was making plans to celebrate flying its one millionth customer, having flown more than 750,000 customers to 21 destinations across Australia in its first year, with 84 per cent of those routes not served by any other airline and 89 per cent of routes not served by a low-cost carrier.”

Just one of Bonza’s 737 MAX 8 fleet, VH-UJK ‘Sheila’, now remains in Australia, with its three other aircraft plus the two it had intended to dry-lease from Canadian sister airline Flair having left the country.

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Comment (1)

  • I find it interesting that the ACCC is commenting/concerned about regional connectivity downgrades if Bonza departs yet when the new VOZ opened the shop and flicked the East Coast regional routes silence remained supreme.

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