Bonza’s Tim Jordan explains why he picked the Sunshine Coast Airport as the home port for his startup airline.
Incoming Australian low-cost carrier Bonza is making waves even before it starts flying. A chatty CEO with an audacious operating model has the airline is capturing plenty of attention in Australia and elsewhere. The surprises continued recently with a range of unusual route announcements and a choice of home airport that raised eyebrows. But Bonza's Founder and CEO explains underneath the hype, there is nothing particularly unusual about his choices.
In an exclusive webinar interview with Simple Flying, Founder and CEO Tim Jordan explained why he picked the Sunshine Coast Airport (MCY) over other airports in his original target zone. It came down to underserved or unserved routes available from the airport and the deal the airport cut with the airline to secure their business. MCY ticked both the boxes.
The way Mr Jordan sees it, Sunshine Coast locals backtracking to Brisbane (90 minutes down the motorway) to take a flight that effectively overflies their house is bonkers.
"There are so many markets in Australia where people do crazy things, not because they want to, but they're backtracking," Mr Jordan said. "They fly the wrong way to then fly back over their house three or four hours later, if they're lucky, or they drive 200 kilometers or 150 kilometers down a highway to them fly back over their house four hours later. And that doesn't make sense for our industry."
The 14th busiest airport in Australia, MCY handled around 1.4 million passengers annually before COVID-19 temporarily culled the numbers. Jetstar, Qantas, Virgin Australia, and Alliance Airlines service the airport. The airport's 2,450-meter runway can easily handle narrowbody jets. While the Sunshine Coast Airport does offer a handy alternative to far bigger Brisbane Airport, 100 odd kilometers south, especially for the approximately 335,000 people who live in the area, most airline passenger traffic traditionally heads to the airport in Queensland's capital.
Flying or driving some distance to pick up a flight that effectively re-covers the ground you've just traveled to make it to your final destination is a familiar scenario for many Australians. Zeroing out the need to do so is behind many of Tim Jordan's route decisions, and he sees the Sunshine Coast as a good example of where this happens a lot.
"If you want to fly north to North Queensland as many Queenslanders do, you have to backtrack on a highway, the Bruce Highway, which is revolting," he says. "A lot of our route network, even outside the Sunshine Coast is, is flying north – it's just common sense. And it's been missing.
"There are a number of those situations, in regional centers across Australia, you fly the wrong direction, or you fly the wrong direction to then fly the right direction on your second flight. And oh, by the way, that's cost you five hours. And very importantly, it has cost you $500 round trip, if you're lucky.
"What we're what we will be taking to the market is a fare of $100 or less, and you'll be at your final destination in an hour and a half. That's a very different proposition. And that's, that's the common-sense element."
It's an operating model many low-cost carriers stick to overseas – flying time-busting routes that ignores the traditional hub-and-spoke model of higher-cost airlines. But it's not necessarily something the Australian market is conditioned to. Nonetheless, Mr Jordan thinks if he builds it, the passengers will come.
While the Bonza CEO sells his choice of a MCY base as a passenger-friendly choice, clear-eyed economic reasons also pushed the airport to the forefront.
"When you're operating markets, which are generally one to two hours in length, the airport cost component is so important," Mr Jordan explained. "Our single largest cost in our business plan was airport costs."
"We have to make sure that our business and our proposition to the market, which is low fares, we can deliver that. It's no good saying you're a low-cost airline and not delivering low fares – we know how that ends."
Sunshine Coast Airport CEO Andrew Brodie calls the deal with Bonza a "partnership." He says it will open up a range of opportunities for employment, business development, tourism growth in the area.
"Through our latest modeling and forecasting, and based on Bonza's current schedule, we estimate that Bonza's presence here on the Sunshine Coast will generate around AU$86million in visitor expenditure in the region in the first 12 months of flights being operational and bring an additional 367,000 seats directly into the Sunshine Coast," Mr Brodie says.
Neither party is putting a hard dollar figure on the value of this partnership, but a deep discount or even waiver of airport and landing charges, airport land for Bonza HQ infrastructure, and marketing assistance are some of the cards MCY could have brought to the negotiating table.
"Those airports that we announced last week, were those that were incredibly proactive, and came to us with a pricing proposition which allowed us to offer super low fares going forward," said Mr Jordan.
In response to questions about why existing airlines in Australia hadn't replicated Bonza's strategy, Tim Jordan says they cannot because their higher cost base makes the strategy unworkable.
"If our cost base allows us to lower the prices to an extent never seen in those markets before we stimulate a brand-new market. And that allows us to be sustainable in those markets. Whereas for other carriers, it will not."
"The other overlay is if you're a business-focused operator, it works for you to have a hub and spoke network because you can offer three or four times a day service into and out of these locations. Well, if all of a sudden they were deploying a nonstop service, that's going to be diluting their own hub and spoke network to a large degree and most likely at a cost base that they can't afford."
Tim Jordan is no fly-by-night dreamer pumped up on avgas fumes. He has a serious high-level airline pedigree. For many Australian observers, his plan seems audacious and potentially unworkable. But this type of operating model has a proven track record elsewhere. Mr Jordan's challenge is to successfully replicate it down under.
On March 7, 2007, the captain of a Garuda Indonesia Boeing 737-400 made a landing that he should have aborted, killing 21 people.
Lead Journalist – Australasia – A Masters level education and appetite for travel combines to make Andrew an incredible aviation brain with decades of insight behind him. Working closely with airlines including Qantas and Virgin Australia, Andrew’s first-hand knowledge of the challenges and opportunities facing Australian airlines adds exciting depth and color to his work and sees him providing commentary to ABC News and more. Based in Melbourne, Australia.

source

Leave a Reply

Your email address will not be published.