It recently wound up the most expansive network rollout in Australian aviation history: 27 routes across 17 destinations. But being the ambitious airline that it is, Bonza is already looking at how it can expand even further into the Aussie air travel market.
Key to this could be Sydney. Though the low-cost carrier must first secure some take-off/landing slots at Australia’s busiest airport, which may prove difficult.
In an interview with Karryon, Bonza chief executive Tim Jordan said the airline would “clearly love to enter the market of Sydney if we could actually get slots which allowed us to”.
“We believe there are up to initially about 20 destinations that we could service to and from Sydney,” he said.
“Very importantly, approximately 90 per cent of those destinations currently don’t see low-cost fares offered on them.
“So we would be looking to offer a low-cost alternative on the absolute vast majority of those destinations. And very importantly, nearly half of those 20 destinations would likely see service to Sydney where there is none today.”
Jordan said a Bonza operation to/from Sydney would work “in a similar way to the way we have launched service to nine destinations out of Melbourne Tullamarine”.
“Seven of those [MEL] destinations have no service from any other airline. And we would like to do something similar into Sydney,” he explained.
“So this isn’t about doing the same as the other guys. This is about us extending what we’re doing elsewhere into the Sydney basin and giving more route choice and giving more low-cost choice to the people of Sydney … and certainly around the country to access the Sydney basin, so that they can explore and vice-versa.”
Where could AB fly?
While Jordan could not say exactly where the airline would fly out of SYD, he said its seven ex-MEL destinations – Tamworth, Bundaberg, Gladstone, Rockhampton, Mackay, Toowoomba, Mildura – offer a glimpse of the type of places to which it could fly.
“It’s those type of destinations … they would dearly love to be connected on a nonstop basis to Sydney. And I’m guessing Sydney from a tourism perspective, but also NSW more broadly, would dearly love to have access to these new markets. And that’s what we’re all about,” he added.
The problem is…
But obtaining slots at SYD is difficult under current legislation.
“When the cancellation rate into and out of Sydney Airport is three to four times the national average, you have to say that something is wrong in the numbers,” he said, referring to laws that allow airlines taking up valuable slots at SYD Domestic to cancel up to 20 per cent of flights without punishment. SYD told Karryon yesterday this then incentivises airlines to over-file for slots.
“Something’s happening, which is leaning operators to behave in the way that they’re potentially operating,” the Bonza boss says.
“And the current system clearly isn’t working. We have just gone through the worst on-time performance in the second half of last year. We have just gone through the worst on-time performance in the history of aviation in Australia. And yet, nobody to my knowledge, has had to give up slots based on the use-it or lose-it rule and essentially the existing slot policy in Sydney.”
However, Jordan says amending that would be an “easier fix than many would have you believe”.
“And in time, what that allows us to do or quite quickly what that allows the market to do is to encourage competition and allow market growth, which is great for the consumer and great for competition.”
A solution is…
A source close to the matter told Karryon “slot misuse and high cancellation rates at Sydney Airport relate specifically to the behaviour of Australia’s domestic airlines operating on the busiest domestic routes”.
“Combined … Australian airlines occupy around 90 per cent of all the slots currently operated at Sydney Airport. In order to improve access for new entrants – whether they are domestic or international – it is important to look at options that will ensure those airlines that hold large volumes of slots actually operate all of these slots or relinquish those they do not,” they said.
“Where airlines are operating below their pre-COVID capacity at SYD they should not be holding the same number of slots they had pre-COVID.
“These improvements will require both (a) changes to the slot rules to make the allocation rules fairer and (b) a much more effective compliance regime to address slot misuse and ensure the Australian public benefits from stronger competition.”
Bonza began flights between its home base, the Sunshine Coast and NSW (Newcastle) in late March.
Read our review of Bonza’s first-ever flight earlier this year.
