By Jamie Freed

SYDNEY – A new Australian budget airline, Bonza, announced on Wednesday that it will operate eight Boeing (NYSE 🙂 Co 737MAX planes during its first year in operation under a lease agreement with 777 Partners (U.S. private investor firm).

Regulation approval is required for the growth of the airline’s fleet. Bonza Chief Executive Tim Jordan stated that the airline had been in contact with Australia’s aviation regulator. He expects to submit a formal license application within the next few days.

It is hoped that domestic flights will be launched with at least two or three aircraft by the end of the year.

The domestic market will see it compete with Qantas Airways Ltd., Virgin Australia, and Regional Express Holdings Ltd. (Rex), aiming at leisure routes not covered by the rivals or underserved.

Partly, the first routes will be determined based upon which airports provide better financial incentives.

Jordan explained that “from our initial expressions to interest at 46 airports around the country, we have received positive feedback form between 35-40 airports.” We are confident to announce the news today because of the positive feedback we received.

Analysts have voiced doubts about whether the airline can fill 186 seats on 737 MAX aircrafts, which fly thin routes. This market is dominated by flights between Sydney and Melbourne, as well as Brisbane. Regional routes are frequently flown by turboprops.

“These are big aircraft for small markets that are going to have to be flying very frequently … to keep them in a way that is economic,” CAPA Centre for Aviation Chairman Emeritus Peter Harbison said in October.

Jordan stated that Bonza’s parent, Canadian-low cost carrier Flair Airlines and Jordan are part of their investment portfolio. Bonza would maintain high aircraft utilization by flying a lot.

March saw 777 Partners place an order for 24 737 MAX airplanes, with 60 purchase rights.