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- 🤯 Inside Bonza’s Collapse: Why Australia’s New Airline Failed
🤯 Inside Bonza’s Collapse: Why Australia’s New Airline Failed
Australia’s first low-cost airline lit up the skies — then vanished overnight. Here’s the 2 mistakes that grounded it.
Admond Lee
October 19, 2025
Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
Today’s story is about how an ultra-low-cost airline in Australia imploded because of 2 deadly mistakes. Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Bonza
⚠️ 2 Mistakes → Scaled routes faster than operational reliability
🧠 3 Lessons Learned → Don’t own distribution until you’ve earned demand
🔗 The Runway Insights → How to get $2M in founder-led sales within a year
💰 Southeast Asia Funding Radar → Lucent raises $1.3M (Pre-Seed) to help AI labs source training data for browser-based AI agents
☠️ 1 Failed Startup: Bonza
🚀 The Rise of Bonza
🇦🇺 Founded in October 2021 by former Virgin Blue executive Tim Jordan (backed by U.S. investment firm 777 Partners), Bonza (Aussie slang for “excellent”) was an Australian ultra-low-cost airline that sought to connect underserved regional routes using Boeing 737 MAX jets.
The Problem — ✈️ Air travel in Australia was dominated by a duopoly (Qantas + Virgin/Jetstar), and smaller cities were often ignored or had sky-high fares.
Many regional centers had no direct flights to certain destinations, or they were only connected via circuitous routes and expensive fares.
This meant long travel times or forced connections for many people.
The Solution — 🌏 Bonza was a domestic ultra-low-cost airline in Australia. It flew point-to-point routes between regional and non-hub cities that were underserved by the bigger carriers.
They used fuel-efficient Boeing 737-8 MAX jets and only sold tickets via a smartphone app, skipping traditional travel agents to keep costs low.
Not just that, Bonza also leaned hard into its Australian brand — cheeky style, local flair — to build affinity and stand out in a serious, often stuffy airline industry.
In short, Bonza’s solution was straightforward:
✈️🤑 Fly routes that others don’t, at prices people can actually afford.
 Bonza’s amazing crew | 📜 After receiving its Air Operator’s Certificate in January 2023, Bonza launched its operations. ✈️ Their inaugural passenger flight took off from Sunshine Coast Airport on 31 January 2023, heading to the Whitsunday Coast with much fanfare. The buzz was insane because Bonza was the first new domestic airline to launch in Australia in over 15 years. |
By March 2023, they had sold over 100,000 seats via their app, signalling strong demand for those cheap flights. New routes rolled out almost every week — connecting places like Cairns, Townsville, Mackay, Avalon (Geelong) and more, often city pairs that previously had no direct flights.
🚀 At its peak, Bonza:
Operated 35 routes to 17 destinations across Queensland, New South Wales, Victoria, and later Tasmania and the NT.
Carried more than 750,000 passengers in about 15 months (not bad for a scrappy upstart).
Opened a 3rd base at the Gold Coast.
📉 The Fall of Bonza
💣 Just when things were starting to look “bonza”, the cracks began to show.
Flights were getting canceled, routes were quietly axed, and rumours swirled about cash running dry. Behind the scenes, the airline’s U.S. backers were tightening the purse strings, and Bonza’s four-plane fleet was stretched to its limits.
Then, almost overnight, the entire operation came crashing down — planes repossessed, passengers stranded, and staff blindsided.
📌 Here’s what happened to Bonza:
I've come in and I can't find anyone to talk to — there's nobody here.
✈️ Now Everyone Can Fly
Oct 2021 — ✈️🇦🇺 Bonza was founded by Tim Jordan (ex-Virgin Blue) with backing from 777 Partners, announcing plans to be Australia’s first independent ultra-low-cost carrier.
Early 2022 — Applied for regulatory approval and initially hoped to begin flying by mid-2022.
However, CASA approval was delayed, and the airline spent 2022 on the sidelines as travel demand rebounded nationally.
Jan 2023 — Bonza finally received its Air Operator’s Certificate.
🙏🏻 The first commercial flight departed Sunshine Coast for the Whitsunday Coast on 31 January 2023, making Bonza the first new domestic airline to launch in Australia in 15 years.
Mar 2023 — 🔥 Reached 100,000 bookings within weeks of launch. It opened a second base at Melbourne Tullamarine Airport, expanding service to 11 destinations from that city.
By this time, Bonza had four 737 MAX aircraft in its fleet, with more on order.
Jul 2023 — ⚠️ After some months of operations, Bonza announced it would axe five routes (Sunshine Coast to Port Macquarie, Tamworth, Coffs Harbour; Toowoomba–Whitsundays; and Cairns–Mackay) and reduce frequencies on others due to low demand and reliability issues.
The company said it was refocusing on routes with sustainable demand and improving its on-time performance.
Aug 2023 — 🤔 Bonza revealed its third base will be at Gold Coast Airport. 2 Bonza aircraft were to be based there, flying 11 new routes from the Gold Coast starting in late 2023 (destinations include Cairns, Townsville, Avalon, etc.).
To support this, Bonza entered a wet-lease deal with Canada’s Flair Airlines (another 777 Partners-backed carrier) to share extra jets during peak season.
🛩️ Mayday, Mayday, Mayday…
Nov 2023 — 🤔 Flights from the Gold Coast base commenced, coinciding with summer holidays.
Bonza also launched routes to Australia’s last few unserved regions (i.e. its first flights to Tasmania and the Northern Territory), bringing its network to 5 states/territories and 21 destinations.
🚨 However, operational strains showed:
On 30 Nov, Bonza cancelled the inaugural Gold Coast–Darwin flight (and all December flights on that route) just hours before departure, citing resource challenges.
Apr 2024 — 🚨🚨 Bonza’s situation unravelled rapidly.
On April 30, with no prior warning to customers, Bonza cancelled all flights and entered voluntary administration.
🤯 This came after its aircraft lessors repossessed the fleet due to Bonza defaulting on payments, literally grounding the airline overnight.
Around 750,000 passengers had flown with Bonza in its 15 months of service before this sudden grounding.
Jul 2024 — 🛩️ Efforts to find a buyer or new investor for Bonza failed.
On 2 July 2024, Bonza’s creditors voted to liquidate the company, as the administrators reported over A$133 million in losses and suggested the airline may have been trading insolvent for months.
Bonza’s 323 staff were left to seek owed wages through government schemes, and the airline’s remaining assets were negligible.
Writing Bonzo’s story reminds me of MYAirline (Malaysia’s low-cost carrier) which failed within 1 year.
Unlike MYAirline, Bonzo failed due to the intense competition, high fixed costs (those jet leases aren’t cheap!), and thin margins.
Bonzo identified a real gap — Aussies did want more flight options beyond the capital-city routes – and for a short time, Bonza delivered exactly that, with plucky enthusiasm and memorable purple planes.
But Bonza expanded faster than it could stabilise, and each misstep (empty flights, canceled routes) drained its limited cash.
🙏🏻 Without deep pockets to keep it afloat through the startup phase, Bonza ultimately ran out of runway.
Want to learn more about Bonza’s downfall?
⚠️ 2 Mistakes
Mistake 1: Scaled routes faster than operational reliability
Bonza rushed to light up a wide map — then had to slash routes and frequencies within 6 months because demand was patchy and the tiny fleet couldn’t backstop disruptions.
🪓 That torpedoed trust and nuked cash. In July 2023 alone, 5 routes were axed for “unsustainable demand”, while reliability issues were already biting.
With just ~4 MAX-8s, a single bird strike, sick crew, or maintenance delay cascaded into cancellations. Reliability is the product in aviation. Once customers expect chaos, the funnel dries up and costs explode.
Mistake 2: Chose distribution and access that capped demand
Bonza sold tickets app-only (no third-party distribution) and launched while largely locked out of Sydney — the country’s richest demand pool — by slot constraints and fees. Great for cost control, awful for market access and early trust.
📍 In a duopoly (Qantas + Virgin/Jetstar) with entrenched habits, you don’t just need a cheaper fare — you need visibility wherever customers already shop.
App-only meant fewer discovery paths; missing Sydney meant missing the biggest tap. Incumbents (Qantas/Jetstar + Virgin) still held ~90–98% of domestic share around this period.
🧠 3 Lessons Learned
Lesson 1: Reliability to build trust first (before scaling)
Bonza’s strategy looked sexy on paper: connect 17+ underserved cities and expand fast. But when your entire fleet is just 4 aircraft, every hiccup is a domino line of disasters.
😖 A single tech glitch or weather delay grounded half their routes. Customers got stranded, staff got screamed at, and trust eroded faster than a runway in monsoon season.
Their heart was in the right place — “give Aussies cheap regional flights!” — but reliability is the core product of a budget airline. When people start saying “I can’t rely on them”, price stops mattering.
That’s when Bonza’s brand promise collapsed.
🌮 Key Takeaways:
🛫 Start with a “boring” network (not a bold one)
Focus on 5–10 routes where demand and operations are predictable.
Nail punctuality, on-time performance (OTP), and service consistency before adding more dots to the map.
🙏🏻 Build redundancy early
Don’t run on 100% capacity. Have at least one aircraft or shift’s worth of buffer to handle delays or maintenance.
In Asia, AirAsia and Scoot run multi-base operations precisely so one glitch doesn’t cripple the network.
✅ Track reliability like a startup metric
Airlines obsess over OTP.
Startups should do the same for their “reliability metric” → uptime, delivery time, bug rate, refund time — whatever defines consistency in your industry.
Lesson 2: Don’t own distribution until you’ve earned demand
Bonza wanted to be a rebel airline. They thought, “Why pay booking fees to middlemen when we can sell directly through our own app?”
On paper, that’s genius. Lower costs, tighter control, more data. In practice, it was suicide by obscurity.
⚠️ Because here’s the hard truth: you can’t “own” demand that you haven’t yet earned. You can’t bypass the ecosystem before the ecosystem even knows who you are.
Controlling costs via direct/app-only is smart — only after you’ve built trust. At launch, maximise visibility where customers already buy.
🌮 Key Takeaways:
🛍️ Go where shoppers are (first 6–12 months)
List inventory on the big OTAs/GDS and local super-apps (i.e. Traveloka, MakeMyTrip, Ctrip, Trip.com).
Negotiate promo slots and bundles to seed discovery.
✌🏻 Dual-track CAC
Run OTA + direct simultaneously, then gradually taper OTA once your branded search and direct conversion clear fixed thresholds (i.e. direct share >60% with CPA < OTA take rate).
🛩️ Anchor one major demand well
If a primary hub is slot-constrained, secure some presence (even red-eye or shoulder slots) for brand proof and liquidity while you build regional dominance elsewhere.
Lesson 3: De-risk your business
🚨 Bonza wasn’t just flying with one set of wings — it was flying on one financier’s lease papers. Their entire fleet of Boeing 737 MAX 8s came from 777 Partners, the same U.S. firm that bankrolled them.
So when the lessors repossessed all four aircraft overnight in April 2024, effectively killing the airline before sunrise.
No planes, no business, no plan B.
If your business dies when one partner sneezes — you’re not running a company; you’re running a dependency.
🌮 Key Takeaways:
🛫 Diversify aircraft exposure
Split leases across lessors and avoid cross-default clauses that let a parent dispute elsewhere ground your fleet.
Keep maintenance reserves transparent and escrowed.
📊 Liquidity early-warning
Implement covenant dashboards and a “runway bar” for 6–9 months cash (fuel spikes + 2 bad quarters).
Lock in standby lines before scale pain starts.
🌍 Contingency ops plan
Pre-paper emergency wet-lease MOUs (regional operators), and define a “minimal viable network” you can keep flying for 90 days if financing wobbles.
🔗 The Runway Insights
💰 Southeast Asia Funding Radar
Lucent raises $1.3M (Pre-Seed) to help AI labs source training data for browser-based AI agents (Link)
Rusk Media, a Gen-Z/A-first digital entertainment company, raises $12M (Series B) for international expansion (Link)
Pantherun secures $12M (Series A) to help businesses safeguard their data against cyber threats and security breaches (Link)
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.
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