Exclusive: ‘Demand is there’ for more airlines, says ex-Bonza CEO

“Five years ago, I was talking about hypothetical demand. I’m no longer talking about hypothetical demand. We have proven it beyond doubt. Demand is there,” he said.

“This country wants to fly more than what it’s doing at the moment, and we are held back by the current environment that we have whereby two airline groups control nearly 99 per cent of the market, and that hurts all of us, and this industry.”

His comments followed an appearance last week before a Senate inquiry into regional aviation, with Jordan also in March labelling the lack of domestic competition as “by far the largest contributor” to high regional airfares.

“It’s not Qantas or Virgin’s fault – they are behaving very, very rationally as businesses – but the competitive environment, they do not have to do more. They don’t have to step out of the comfort zone. Cozy is good enough. They’re making great money. It’s very comfortable,” he told Australian Aviation.

“If we were in that situation, if we were running the businesses, I’m sure we’d do the same. Government has facilitated this environment [with] decisions which led us to the competitive environment which we have, decisions like in 2013 when Tiger was sold to Virgin Australia.

“It was pretty obvious where that was going. I lobbied in 2013 that that shouldn’t happen. The decision to not support Virgin in 2020 by the government, they went from, what, 130 aircraft, down to 80.

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“So, we’re not talking about an environment here whereby we’ve got two competitors going at each other with roughly 50 per cent shares. We’ve got one dominant competitor and one half the size.”

According to Jordan, Bonza had an average load factor across all its flights of 70 per cent, which was growing across its forward bookings, and it was expecting to be cash-positive by the end of 2024, having brought in $100 million in revenue across its first four quarters.

“We didn’t get this revenue out of Qantas’ pocket or Virgin’s pocket. This was new revenue which was stimulated,” he said.

“83 per cent of our markets were unserved by other operators, and we stimulated [an average of] 130 customers on each and every flight.”

Jordan also confirmed reports that an unnamed Australian investor had been interested in Bonza before its collapse, but said the investor had backed out once the airline’s fleet of six 737 MAX 8s was seized, prompting its collapse into voluntary administration.

“They had seen enough in the numbers, in the forward numbers that they said ‘we want in’, and they were going back and forth with 777 Partners, there was a term sheet which had gone between the parties,” he said.

“So, you know, I was optimistic, incredibly optimistic that we were finally potentially going to have Australian ownership, which I’d been looking for since 2008 – this should always be, ideally, Australian owned, and we got very, very close to that.

“There was a term sheet exchanged, and there was back and forth between the parties, and that was ongoing – and then our aircraft were repossessed.”

The FBI last year charged 777 Partners’ co-founder and chief financial officer over an alleged US$500 million fraud scheme.