THE domination of the country’s “big two” airlines, Qantas Airways and Virgin Australia, is as entrenched as ever, Bonza Chief Executive Officer Tim Jordan has told travelBulletin.
Although there are more airlines operating in Australia now than previously, Jordan said the control the big two exert calls into question why the Australian Competition & Consumer Commission (ACCC) is wrapping up its oversight of the industry now.
“Yes, we have more airlines operating in Australia, but the scale of the influence of the two largest players in the market is as large as it has always been…it really has not dissipated,” he said, in the wake of the final ACCC Airline Competition in Australia report.
“Ninety-four percent of the market is centralised with two operators…that is very very damning for our industry, and I think sets the context for why oversight should continue.
“That doesn’t seem to align with a more competitive environment going forward.”
Although the ACCC claims the entry of Bonza and expansion of Rex Airlines has created a chance for the domestic airline industry to enter a more competitive period, Jordan said realistically, this climate may not be apparent for a number of years.
He said in particular the strength and the market penetration of incumbent carriers is a significant barrier to entry for the domestic market.
“It does take time for new entrants to build sufficient scale,” Jordan explained.
“There are barriers to entry slots at the number one airport in the country, and those types of barriers to entry are significant”.
Jordan stressed Australia should endeavour for more multi-airport cities, when pressed on another way to provide greater competition around the country.
“It’s no coincidence Melbourne is the only capital city Bonza has chosen to fly to,” he hinted at.
“We fly to both airports in that single location, and it’s the only capital city we currently service.
“The more that we as an industry can encourage multi-airport cities, the better for competition, and the better for airport access.
“Anything that government can do to encourage multi-airport cities will be good for the consumer, good for root growth, and good for customer choice.”
Meanwhile, Jordan said Bonza is working toward improving its on-time performance, an area the airline’s head listed as one of its most problematic during its launch phase.
“On-time performance has been challenged, especially during the first peak period in April, whereby our loads were incredibly strong (which is a fantastic outcome),” he said.
“However, we were only moving and deplaning the aircraft through one door.
“We’re working toward deplaning through both doors because we know that will be a significant improvement.”
However Jordan reported Bonza improved its on-time performance from April to May, with its percentage heading into the 70s.
“We’ve still got a lot of work to do, but that will probably be the largest area of our focus, as we move out of the start-up phase and into the business improvement phase before we then go to into a growth phase again.”
