Budget airline Bonza has confirmed its commitment to start airfares at $50 per hour of flying time, with experts confirming the new player in Australian aviation should be well placed to deliver on that promise.
“Aussies can expect flights to start from around $50 per person, one way,” Bonza chief executive Tim Jordan told TND on Tuesday.
Mr Jordan had earlier told Australian Aviation he expected fares to be “pretty close” to the $50 estimate he gave in late 2021.
“We will be pretty close to the headline numbers that we put out there,” he told the industry publication.
“We do have the most fuel-efficient and youngest fleet in Australian skies, so there are absolutely benefits for us coming to the market with brand new aircraft.
“There is certainly cost-of-living pressures everywhere, and while that may have some impact in terms of the pricing, it’s certainly not going to be overly material.”
In November, Mr Jordan told Sky News that travellers on flights lasting about an hour should not be paying much more than $50.
“We’re about market growth, but those fares will be incredibly low. We believe that if you’re flying about an hour you shouldn’t be paying much more than about $50,” he said.
Bonza is well placed to deliver the cheap fares but warned that ancillary charges, such as baggage and credit card fees, could result in more expensive tickets, experts told TND.
“I don’t think they have over-promised, as they are still saying that fares on their first route between the Sunshine Coast and Whitsunday Coast will be as low as $59 one way,” said Professor Rico Merkert, chair in transport and supply chain management at the University of Sydney.
“There may be ancillary charges, as is common in the low-cost carrier business model, so the total price might be slightly higher.
“For the rest of their network, they say that fares should start from about $50 for every hour you fly.
“So on a three-hour flight, that would be $150, which sounds still quite competitive but financially also more sustainable.”
Professor Doug Drury, head of aviation at Central Queensland University, said Bonza will save on maintenance costs, which usually could be passed on to customers.
“The Boeing MAX 8 is brand new, it’s more efficient. So you’re not doing heavy maintenance on a 25-year-old aeroplane, or 15-year-old aeroplane. So there’s a cost saving right there,” Professor Drury said.
Bonza was cleared by the aviation regulator to fly last week after a lengthy review, but is yet to confirm when its planes will take to the skies.
There are 27 routes planned by Bonza across 17 destinations in Victoria, Queensland and New South Wales.
Mr Jordan told TND that the airline hopes to expand into other states and territories at a later date.
“Our initial route map is only the beginning. We’d love to see our purple planes in WA, NT, Tas, ACT and SA skies in the future but for now, our focus is on earning the right to grow.”
Airfares falling
Airfares have dropped and discounts increased over January, data from the Bureau of Infrastructure and Transport Research Economics (BITRE) shows.
BITRE’s ‘best discount airfare’ index hit a 15-year high in December with 112 points that fell to 74.5 in January.
Prices remain higher this month than at the same time last year when the index read 54.1 points.
The price drop comes after the ACCC put the sector on notice in late 2022, saying it would be watching domestic carriers to ensure extra seats and flights were being added in a bid to bring down fares.
“But if you look at that April to January spike [in airfares] it’s rather steep in both directions,” Professor Drury said.
“So airlines increased prices and now they’re dropping again, so I’m assuming that the ACCC has been effective in their message.”
He is hopeful that a downward trend will emerge.
“I would hope they would come down,” he said.
“Right now business-class travel internationally [costs] what first-class travel did two years ago. And premium economy is what business-class was two years ago.
“As long as people are going to pay that, then the airlines are going to keep charging that.”
