Budget airline Bonza has suspended all of its services due to concerns over business viability. But the question is, What went wroung ? Is Australian domestic air travel can't accomodate another carrier ? Is it due to the Duopoly of two carriers ? Who is responsible for the failue of Bonza ?
The popular noise is that the company was forced to sit down after a company 777 Partners ,behind its aircraft provider, repossessed its planes in Australia leaving thousands of passengers stranded on Tuesday.
Tim Jordan, CEO of Bonza, the Australian LCC ,wrote to the staff,
“We have been informed this morning that effective 0300 today that all our aircraft have had repossession proceedings commenced by AIP Capital, the aircraft lessor.”
According to administrator Hall Chadwick , the fleet would remain grounded until May 2 and advised passengers with bookings not to proceed to the airport for Bonza flights. At this time, the administrator is considering whether to keep trading including the employment of around 90 staff or not ?
For the passengers affected, after being asked by Australian transport minister Catherine King, Virgin Australia and Jetstar became ready to accomodate the stranded travellers for free on Tuesday.
Qantas was ready to accomodate the passengers and employees of Bonza as well, it released a statement saying,
"If Bonza employees would like to discuss recruitment opportunities within Jetstar and Qantas, particularly in specialised fields which are unique to aviation, we’ve set up a dedicated page on the Jetstar careers website."
"For any customers with a cancelled Bonza flight on a route we operate, to make sure you’re not further out of pocket, you can fly with us at no cost where we have seats available."
Minister Catherine King says, despite knowing since last week of issues with Bonza's finances and communicating with them since, the government only became aware of the situation at hand this morning when flights were cancelled.
Ms King said Qantas, Jetstar, and Virgin immediately stepped forward to say they will bring stranded passengers home after speaking to them this morning.
Updating the situation on the carrier, Bonza chief executive Tim Jordan, issued the following statement this morning:
"Bonza has temporarily suspended services due to be operated today (Tuesday 30th April), as discussions are currently underway regarding the ongoing viability of the business. We apologise to our customers who are impacted by this and we’re working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market."
Bonza, that was aiming a disruption in Australian air travel market, was designed to take leisure travellers to destinations not served by the major airlines. It flew to unconventional places such as Rockhampton, Mildura and Port Macquarie.
Led by former Virgin Blue executive Tim Jordan and following the foot steps of Ryanair , The airline, whose tagline was “Here for Allstralia”, promised to shake up Australia’s uncompetitive aviation sector with cut-price tickets and no-nonsense, down-to-earth service.
Some aviation experts always believed the budget airline Bonza would struggle to remain in service, as it dared to take-off in one of the world's most cutthroat aviation markets,and never really stood a chance.
The carrier hit the turbulence early on, even before taking-off, Bonza struggled to find a way through the framework of regulatory maze, battled Qantas and Virgin for airport slots, also found it difficult to hire skilled and experienced staff.
A questionable of airport regulatory system could have some stake in this failure story ! Now, the role for the administrators would be to find out if Bonza could strike a deal with airports after the ACCC issued its airport monitoring report on Tuesday calling for reform to airport regulatory systems.
It was not easy for the carrier, there were the regular operational issues inherent with starting a new airline. flight cancellations, baggage delays, and communication issues, were no where better than the existing Australian carriers.
But the worst was the self restricted business model to stand alone, and among the potential causes for Bonza’s business debacle was that the company picked up regional routes that were not being serviced by anyone else. In order to differentiate its service from the rivals, it kept on insisting to serve mostly regional centres that the other operators didn't frequent.
Australian aviation is not an easy walk, irrespective of the inputs, causes and dramas, carrier like Compass Airlines, Ansett Airlines, Virgin Blue and Tiger Air have tested their fate in the past , Bonza is the latest addition to that ! Though a quick recovery can only be hoped, it won't be a cake walk either.
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