Tim Jordan built Bonza from an idea formed on his verandah, watching a Qantas plane fly overhead. Fifteen months and one million passengers later, it was gone. In April 2026, he addressed a Senate committee inquiry, and for the first time since Bonza’s collapse, spoke publicly about what he saw from the inside.

Tim Jordan’ submission

Jordan’s submission to the Productivity Commission’s concurrent inquiry into regional airfares is a direct and credible assessment of Australia’s aviation market structure. It is by someone who raised capital, obtained an AOC, hired staff, bought aircraft, and flew a million Australians to destinations that were previously either unserviced or overpriced.

His central findings are highly insightful:

Market concentration: Jordan stated that “Australian aviation is the most centralised and consequently the least competitive of all major domestic aviation markets in the world.” More than 98 per cent of the domestic market is controlled by the Qantas Group and Virgin Australia, with Qantas holding approximately twice the market share of Virgin.

Duopoly dynamic: The “current entrenched position of the Qantas Group along with a Qantas-tolerated Virgin group drives a very ordinary aviation outcome for Australian consumers.” Jordan is not suggesting illegal collusion, but a market structure where the dominant carrier has calibrated the acceptable level of competition, and the number two carrier has found its lane within it.

Regional routes: Jordan described the fare disparity between trunk and regional markets as “a regional rort that millions of Australians have to live with every day.” He identified lack of competition as “by far the largest contributor” to high regional airfares, ahead of airport charges, ground handling monopolies, and other structural costs.

Bonza’s service provision: Bonza flew to 22 destinations over 15 months. Eighty-three per cent of its routes were not served by any other airline. It averaged a 70 per cent load factor from first flight to last. In its first full year, it generated $100 million in revenue. Jordan was blunt: “It is no longer debatable whether there is a market. We know that. We showed that.”

Competition effect: Jordan cited federal government competition taskforce data showing that the price per kilometre halves when three carriers compete on a route compared with a single monopoly. With four or five competitors, the price drops further still.

Government assistance: Bonza was asked on a Saturday morning whether it needed federal assistance. It said yes. By Sunday evening, the answer had changed to no. Three months later, the government committed tens of millions to keep Regional Express in administration.

The ACCC’s submission to the same inquiry reinforced Jordan’s analysis. It found that while recent new entrants had initially increased choice and placed downward pressure on fares, “their failures illustrated the difficult environment for newcomers.” Both airlines “faced structural and financial challenges that prevented sustained competition, underscoring the significant barriers to entry in thin regional markets.”

The Loyalty Wall: Qantas Frequent Flyer and Velocity Frequent Flyer

To understand the full scale of the loyalty barrier facing any new Australian aviation entrant, it is necessary to look at Qantas and Virgin Australia’s frequent flyer programs:

Qantas Frequent Flyer has over 18m members (estimated 10-12m active), making it one of the most deeply embedded loyalty programs in Australia. It extends well beyond the airline, with earn opportunities through supermarkets, fuel retailers, banks, hotels, insurance, and hundreds of retail and e-commerce partners. Status tiers from Bronze through to Platinum One create strong aspirational lock-in, particularly among business travellers and frequent flyers (the author is Platinum One and directly understands the power of status as an engagement driver). Switching airlines can mean giving up lounge access, priority boarding, upgrade credits, bonus earn rates, and the social identity that comes with being a recognised high-value member.

Velocity Frequent Flyer has over 12 million members (estimated 5-6m active) and operates across more than 80 program partners and 300-plus e-Store partners, with co-branded credit cards through American Express, NAB, Virgin Money, and Westpac providing strong everyday earn outside of flying. Velocity has a tiered status architecture covering Silver, Gold, Platinum, Platinum Plus (the new highest published tier), and a Forever Gold lifetime status category for long-term members.

Together, the two programs create what might be called a loyalty wall, with a combined membership base that covers 70-80% of Australia’s 26 million people. The overlap also is significant, as some Australians hold both. The practical effect is that any new entrant must compete not just on price and schedule, but against the accumulated value that millions of members have stored in programs they have no intention of abandoning

Jordan’s characterisation of Velocity as “Qantas-tolerated” is worth examining through a loyalty lens. Velocity is a genuine competitor to QFF in many respects. It has made meaningful investments in its program, introduced Forever Gold as a genuine lifetime loyalty proposition, and launched aggressive status credit and status matching promotions to win over frequent travellers. But it competes within a structure where the number one carrier sets the reference points, and the number two carrier positions itself as a credible alternative without fundamentally threatening the incumbency economics. From a new entrant’s perspective, the difference between competing against one loyalty program and two is not trivial. It closes off almost every segment of the market from a customer retention standpoint.

The Norwegian Precedent

Loyalty & Reward Co explored the SAS EuroBonus story in depth in a previous article on this blog, which we feel is directly relevant to the debate now unfolding in Australia. It deserves to be examined as a policy instrument, not just a case study.

Norway deregulated its domestic aviation market in 1994, intending to introduce competition, reduce fares, and improve service. The deregulation was real, but its effects were constrained. SAS, the incumbent Scandinavian carrier, had built a formidable customer retention tool in the EuroBonus frequent flyer program. As the market opened, a new entrant discovered that it was not enough to offer a cheaper ticket. The millions of Norwegians who had accumulated EuroBonus points and accessing status benefits, lounge access, and upgrade priority, were deeply reluctant to switch. Switching costs created by loyalty programs are not psychological trivialities but, as the academic literature confirms, a very powerful retention mechanism.

Color Air entered the Norwegian market in 1998, four years after deregulation. It offered lower fares. It lasted 13 months. Its failure had multiple causes, including undercapitalisation and the absence of any loyalty response of its own. But the EuroBonus effect was material.

In 2002, Norway’s Competition Authority took an extraordinary step. It banned the earning of frequent flyer points on domestic routes for all airlines. The intervention applied to SAS, to Braathens, and to any other carrier operating domestically. It was not a nudge or a review recommendation. It was a prohibition. The rationale was that loyalty programs had become anti-competitive barriers to entry, and the ban was designed to reduce switching costs so that new carriers could compete on fare and service, rather than against an entrenched points economy.

The ban lasted 11 years, lifted in 2013 following pressure from the European Free Trade Association, which determined it was inconsistent with broader trade obligations. By that point, Norwegian Air had emerged as a genuine low-cost competitor, eventually reaching over 35 million passengers annually before its pandemic restructuring. The market had not become perfectly competitive, but the structure had shifted materially.

The question for Australia is whether a version of this intervention, applied to both Qantas and Virgin Australia, belongs in the Productivity Commission’s toolkit.

The Case For a Norwegian-Style Intervention

1. The structural problem is real and well-documented

Jordan’s submission is not an outlier. The ACCC has tracked declining regional route coverage and the government’s own competition taskforce confirmed the fare-reducing effect of additional competition. The Productivity Commission inquiry was established precisely because the problem is not resolving through normal market mechanisms. Deregulation alone has not worked. Australia’s domestic aviation market was deregulated in 1990, and 35 years later, more than 98 per cent of the market sits with two airline groups. If market liberalisation was going to produce durable competition, it would have done so by now. This ‘dominant duopoly’ structure is very common in Australia across other industries such as grocery, telecommunications and more.

2. Two loyalty programs are a bigger barrier than one

The critical insight that is often missing from Australian policy debate is that any new entrant faces not one loyalty program but two. A Bonza-style carrier targeting price-sensitive leisure travellers might conceivably position itself as an alternative to QFF-heavy trunk routes. But Velocity Frequent Flyer serves many of those same leisure travellers and, with 12 million members and aggressive promotions around status credits and reward seats, it creates its own meaningful retention pull. The combined effect of two well-resourced, deeply embedded loyalty programs is not simply additive. It is compounding, because members who hold both QFF and Velocity status have even less incentive to experiment with a third carrier that offers neither. The Norwegian ban was applied universally across all airlines, not just to the dominant carrier. Any Australian equivalent would need to follow the same logic.

3. Velocity’s recent program changes may have created an opening, but not a lasting one

Velocity made significant program changes in 2024 and 2025 that a number of members received poorly. Making status harder to earn, increasing redemption costs, and removing or reducing certain Gold tier benefits generated genuine member dissatisfaction. For a brief window, some disillusioned Velocity members may have been more receptive to a new entrant’s proposition. But this is a temporary and unpredictable effect. Velocity has since launched record status credit promotions and competitive offers to win members back. Relying on a competitor making loyalty mistakes is not a sustainable basis for new entrant strategy. The structural problem remains.

4. The Norwegian model showed that removing the loyalty barrier can work

Norway’s ban did not produce a perfectly competitive market. But it did materially reduce one of the most powerful barriers to entry and created the conditions for Norwegian Air to develop into a genuine competitor. The competitive pressure it exerted reduced domestic fares and improved route coverage. Australia’s version of this intervention does not need to replicate Norway’s exactly. But the core logic, that loyalty programs create switching costs that make market entry structurally harder, and that reducing those costs is a legitimate policy objective, is sound.

5. Australian consumers are paying a real price

The Jordan submission and the ACCC data are not abstract. Connectivity that should be a basic feature of a large, geographically dispersed country is unavailable or prohibitively expensive for communities that depend on it for medical access, economic participation, and social connection. The cost of inaction is material.

The Case Against

1. The ban did not necessarily produce durable competition in Norway

Norway is a useful comparison but not a perfect one. Even with the FFP ban in place, Color Air failed. Braathens was ultimately absorbed by SAS. SAS retained dominance through the entire period. The ban was lifted after 11 years, and EuroBonus was reinstated. The Norwegian experience shows that removing a loyalty barrier is a necessary but not sufficient condition for durable competition. Structural economics, capital requirements, and network density also need to be addressed.

2. Bonza’s failure was not primarily about loyalty programs

Jordan was direct about this. Bonza collapsed because its sole investor, 777 Partners, imploded due to an alleged US$500 million fraud. The airline had a 70 per cent load factor. It had real revenue. It had proven demand. What it lacked was a diversified capital structure. Neither a QFF ban nor a Velocity ban would have saved Bonza. The deeper problem is that Australia’s regulatory and financial environment makes it extraordinarily difficult to attract credible aviation investors, and that requires a different class of intervention.

3. Penalising loyalty members is a serious act

A ban on earning QFF points and Velocity Points on domestic routes would directly penalise the members of both programs who have structured their spending and travel behaviour accordingly. For many Australians, particularly frequent business travellers, the accumulated status and points in both programs represent real economic value earned through sustained loyalty. Removing the ability to earn on domestic flights would be a material devaluation of both programs, affecting consumers who have done nothing wrong and who would be unlikely to see the promised competitive benefits materialise quickly, or at all.

4. Both airlines would adapt, and Velocity may adapt faster

The Norwegian ban worked partly because EuroBonus was, at the time, primarily flight-based. Both QFF and Velocity are already far more diversified through credit card co-brands and partner ecosystems. Qantas, with its financial scale and partner depth, would work around a domestic earning ban through deepened partner rates, credit card earn incentives, and status benefit positioning. Velocity, which has been actively expanding its everyday earn proposition through partners like AGL and DiDi, would do the same. The ban might reduce lock-in at the margin, but it would not eliminate the structural advantages of incumbency. Virgin Australia would likely respond by doubling down on the status credit and experiential elements of Velocity that a ban could not directly restrict.

5. Velocity’s role is genuinely dual

Here is the most nuanced point in this debate. Velocity Frequent Flyer simultaneously acts as a retention tool for Virgin Australia and as a competitive constraint on Qantas. Without Velocity, Virgin Australia’s ability to compete for business travellers would be materially weaker, and Qantas’s dominance would be even greater. A policy that restricts both programs equally might inadvertently strengthen Qantas’s dominance by hollowing out Virgin Australia’s competitive position, particularly among the high-value corporate travel segment where status and lounge access are often decisive. This is a genuinely difficult trade-off that the Norwegian comparison does not directly illuminate, because Norway’s market had a much more evenly matched incumbent structure.

6. The structural problems go well beyond loyalty

Jordan’s own submission identified five contributors to high regional airfares. Loyalty programs are one tool in an incumbent’s retention arsenal, not the only one. Slot hoarding at Sydney Airport, thin route economics, absence of credible institutional capital for aviation start-ups, and the monopoly positions of airport operators and ground handlers are not addressed by a loyalty ban. Addressing one barrier while leaving the others intact is unlikely to produce durable new entry.

7. International obligations constrain the policy space

Norway’s ban was ultimately lifted not because policymakers changed their minds, but because it was found inconsistent with EFTA obligations. Australia operates within WTO commitments and bilateral air services agreements that place constraints on domestic competition policy. A domestic FFP point-earning ban would need careful legal architecture to survive challenge, and the 11-year Norwegian experience suggests that even a sustained intervention can ultimately be unwound by supranational pressure.

The More Nuanced Question

The Norwegian experience invites a more precise question than simply whether Australia should ban domestic FFP point-earning across QFF and Velocity. The real question is ‘what combination of structural interventions would create the conditions for durable third-carrier competition?’

Jordan’s most recent proposal, that charter flight rules should be reformed to allow low-cost seasonal services on leisure routes during school holidays, is a good example of targeted intervention that could reduce incumbency advantages without requiring a blunt loyalty prohibition. If a third operator can enter a market for eight weeks per year, price transparently, and demonstrate demand, it changes the competitive dynamic at lower political and legal cost.

Other interventions with real merit include:

• Slot reform at Sydney Airport: Bonza never secured peak slots at SYD. The slot system concentrates the most commercially valuable flying periods in incumbent hands. Use-it-or-lose-it rules with meaningful teeth would lower barriers to entry more directly than a loyalty ban.
• Ground handling competition: Jordan identified the lack of ground handling provider choice as a meaningful cost driver. Opening this to genuine competition would reduce operating costs for new entrants.
• Aviation start-up capital framework: Australia has no equivalent of the mechanisms used in other sectors to support new market entrant viability. A structured investment or loan guarantee framework could reduce the dependency on single, concentrated foreign capital sources that ultimately destroyed Bonza.
• Mandatory transparency on program devaluations: Both QFF and Velocity have made significant changes to their programs in recent years, in most cases to the detriment of members. Requiring advance notice and a standardised disclosure regime for material program changes would give members more genuine ability to make informed switching decisions.

Loyalty & Reward Co’s View

Loyalty programs are legitimate and valuable for both consumers and businesses. Qantas Frequent Flyer and Velocity Frequent Flyer are highly successful loyalty programs. Together they represent an impressive achievement in embedding loyalty into the everyday lives of Australians. Restricting either is not a decision to take lightly.

But Tim Jordan’s submission is too important to dismiss. The diagnosis is credible, the data is clear, and the human cost of inaction is real. Millions of Australians are paying more than they should because market mechanisms have failed to produce genuine competition, and successive governments have lacked the appetite to address the structural reasons why.

The Norwegian intervention showed that loyalty programs can be a meaningful barrier to entry and that reducing their switching cost effect, even imperfectly, can create space for new competition to develop. But Norway applied its ban to a market with one dominant incumbent and a distant number two. Australia’s market, where two loyalty programs together hold 27 million accounts and the second carrier plays a role that is partly competitive and partly stabilising, requires more surgical thinking.

The right answer for Australia is clearly not a wholesale ban on domestic earning in QFF and Velocity. But it is not another inquiry that recommends monitoring and further review, either. It is a package of interventions that together reduce the structural advantages of the duopoly, including reformed slot rules, genuine ground handling competition, and a funded pathway for credible new entrants.

Jordan’s closing line to the Senate committee captured the stakes: “It would be wrong of us not to execute that as a country.”

He is right. The market has demonstrated that demand exists. A million passengers in 15 months on routes that nobody else was flying is not a rounding error. It is an indictment of the status quo. It is now time for policy to match the ambition.

Sources

Tim Jordan’s Submission and Senate Inquiry

1. Ex-Bonza CEO takes aim at Qantas over regional airfares — Australian Aviation https://australianaviation.com.au/2026/03/ex-bonza-ceo-takes-aim-at-qantas-over-regional-airfares/
2. Bonza founder Tim Jordan tells of ‘regional rort’ to Senate probe — The Border Mail https://www.bordermail.com.au/story/9215329/bonza-founder-tim-jordan-tells-of-regional-rort-to-senate-probe/
3. Tim Jordan: Bonza founder reveals plan for cheaper flights — The Border Mail https://www.bordermail.com.au/story/9217679/tim-jordan-bonza-founder-reveals-plan-for-cheaper-flights/
4. Bonza Airlines came a cropper due to ‘maverick’ backer — AAP News https://aapnews.aap.com.au/news/bonza-airlines-came-a-cropper-due-to-maverick-backer
5. Travel Bulletin Weekly Wrap, 13 March 2026 — Travel Bulletin https://travelbulletin.com.au/feature/travel-bulletin-weekly-wrap-fri-13-mar-2026/

Productivity Commission Inquiry

6. Determinants of Regional Airfares: Call for Submissions — Productivity Commission https://www.pc.gov.au/inquiries-and-research/regional-airfares/
7. Determinants of Regional Airfares: Call for Submissions Paper (PDF) — Productivity Commission https://assets.pc.gov.au/2025-12/regional-airfares-call.pdf

ACCC and Competition Data

8. Remote air connections dwindling as demand rises, says ACCC — Australian Aviation https://australianaviation.com.au/2026/03/remote-air-connections-dwindling-as-demand-rises-says-accc/

Bonza Background

9. Co-founder of Bonza’s financial backers arrested for fraud — AeroTime https://www.aerotime.aero/articles/bonza-co-founder-arrested-fraud-charges-us
10. Bonza CEO takes 8-hour train to avoid $1k airfare — Australian Aviation https://australianaviation.com.au/2023/10/bonza-ceo-takes-8-hour-train-to-avoid-1000-airfare/

SAS EuroBonus and Norway

11. Do Loyalty Programs Work? Just Ask SAS EuroBonus — Loyalty & Reward Co https://loyaltyrewardco.com/do-loyalty-programs-work-just-ask-sas-eurobonus/
12. Frequent Flyer Programs in Norway — Life in Norway https://www.lifeinnorway.net/frequent-flyers/
13. Norwegian Air Boosts Loyalty Investments to Capture More Corporate Travel Share — Skift Airline Weekly https://airlineweekly.skift.com/2023/02/norwegian-air-boosts-loyalty-investments-to-capture-more-corporate-travel-share/
14. Norwegian Reward offers Status Match with SAS EuroBonus — Norwegian Air press release https://media.uk.norwegian.com/news/norwegian-reward-offers-status-match-with-sas-eurobonus-487166

Qantas Frequent Flyer and Velocity Frequent Flyer

15. Velocity Frequent Flyer hits 12 million members — Australian Aviation https://australianaviation.com.au/2024/04/velocity-frequent-flyer-hits-12-million-members/
16. Velocity Frequent Flyer program changes — Virgin Australia https://www.virginaustralia.com/au/en/newsroom/2024/10/velocity-frequent-flyer-announces-program-changes-new-status-tiers-and-one-million-domestic/
17. Velocity Frequent Flyer surprises members with record bonus Status Credits — Virgin Australia https://www.virginaustralia.com/us/en/newsroom/2026/2/velocity-frequent-flyer-surprises-members-with-record-bonus-status-credits/