Here’s why Qantas (ASX:QAN) is not having such a ‘Bonza’ day

Bonza is looking take a piece of the domestic flight pie, which might be making Qantas investors nervous…

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The Qantas Airways Limited (ASX: QAN) share price is flying towards a negative session to finish the week on Friday.

In afternoon trade, shares in the country’s largest airline are down 0.9% to $5.50 apiece. The weakness in the Aussie airline comes amid an update from its newest potential competitor.

Inbound domestic airline Bonza Airlines is bringing the true blue spirit to its US-backed budget ambitions with its recently announced slogan. Yet to take flight, Bonza unveiled its “Here for Allstralia” tagline as it gets set for takeoff.

With its 101 year-long history, Qantas has fought off many would-be competitors to remain a force to be reckoned with. But, history isn’t always a conclusive rendition of how the future may unfold. Hence, some Qantas investors might be feeling a little nervous today as more competition enters the market.

Threatening domestic budget business

A new entrant into the Australian budget airline market is looking more likely as Bonza Airlines progresses with its plans. The latest step forward for the new company is its fresh branding, hoping to attract travel-hungry customers away from ASX-listed Qantas.

For some background, the purple and white emblazoned airline is headed up by ex-Virgin Blue corporate’s Tim Jordan and Rick Howell. While it’s currently taking expressions of interest from potential patrons, Bonza is aiming for a mid-2022 launch date.

Reflecting on the selected slogan, Bonza CEO Tim Jordan said:

Everything Bonza would be, in terms of bringing low fares to all of Australia, wherever you may be. Our intention is to bring leisure fares within the reach of all of Australia and hence ‘here for Allstralia’ is what we need to be and what we shall deliver in coming months and years.

If it successfully launches, Bonza will be going toe to toe with the dominant domestic foothold of Qantas. According to its FY21 full-year presentation, the legacy airline held a 70% share of domestic capacity. This meant the company was the leading premium and low-cost carrier during the financial year.

Interestingly, Qantas has already increased its number of flying routes to unserviced destinations since Bonza came a-knocking on the door of the Australian domestic market.

How Qantas stacks up to other ASX-listed flight providers

It has been an underwhelming past year for Qantas on the ASX. Despite the lifting of many restrictions across Australia, the business remains heavily impacted by the dormant international market.

In the past year, Qantas shares have largely traded sideways with a recent bump, returning 4.4%. However, the performance was still better than the regional-focused airline Regional Express Holdings Ltd (ASX: REX), which fell nearly 5% during the same period.

TradingView Chart

Meanwhile, in a league of its own, the Alliance Aviation Services Ltd (ASX: AQZ) share price far outperformed Qantas over the past year. The Queensland-based charter flight provider benefitted from an expansion during COVID-19 disruptions. In turn, its shares appreciated by 22.1% over the course of the last year, as shown above.

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