Earlier, travelers were held waiting as talks on the “viability of business” took place.
Tuesday saw the voluntary administration of the low-cost airline Bonza, which had immediately canceled all of its flights in response to the unexpected repossession of its entire fleet, which took its CEO by surprise.
When Bonza “temporarily suspended” all services scheduled to be performed on Tuesday without prior notice, leaving passengers stranded at a few airports while the airline’s owners assessed the feasibility of the business’s future.
According to paperwork submitted to the Australian Securities and Investments Commission (Asic) on Tuesday, Bonza selected Hall Chadwick as the business to handle the administration of its holding company and operational company.
Bonza CEO Tim Jordan said in a statement that “discussions are currently underway regarding the ongoing viability of the business.”
“We sincerely apologize to our customers who have been affected by this, and we’re working swiftly to find a solution that will guarantee that the Australian domestic aviation market remains competitive.”
Tuesday afternoon, the board of Bonza convened an emergency meeting to deliberate on the airline’s future course of action.
The transport minister, Catherine King, stated shortly after the cancellations were made public that Bonza had been contacted by her department and that “our expectation is that they keep passengers informed of their options and their consumer rights.”
For passengers who are stuck in Bonza, the transport authorities launched a hotline on Tuesday morning. 1800 069 244 is the number for the helpline.
“I have had conversations with the CEOs of Qantas and Virgin this morning, and both airlines are prepared to help stranded travelers who need to get home,” King declared.
Speaking later on Tuesday from Melbourne, King said, “We’ll wait to hear what the Bonza board is deciding,” without responding to inquiries about whether Bonza had requested a government rescue.
“It’s never easy for someone who is just starting out. Even though we are incredible travelers and would want to travel constantly, we are a small market. However, because our industry is limited, it is always exceedingly challenging for new competitors, King added.
The Guardian was informed by aviation sources that Bonza’s Boeing 737 Max 8 fleet had been repossessed.
The Boeing 737 Max 8 fleet of Bonza Airlines was owned by US private equity firm 777 Partners. The main firm rents its aircraft assets to the airlines and also owns a portion of Flair, a low-cost carrier in Canada.
In 2023, Flair experienced an abrupt repossession of certain of its aircraft.
In recent months, Bonza has been using two wet-leased aircraft from Flair in addition to its current fleet of four aircraft.
It looks like one of the aircraft that Bonza had been renting from Flair has returned to the Canadian airline and was operating on North American routes on Monday.
Phoenix Aviation Capital is a new holding company that was disclosed on April 9 by AIP Capital, an investment manager that includes aviation assets such airplanes and that formerly controlled the majority of 777 Partners’ fleet of aircraft in a 51%–49% split.
Phoenix stated that it has “a definitive agreement to acquire the rights, interests and obligations of a portfolio of 30 737-8 aircraft from 777 Partners” when it made its launch announcement.
Jordan informed employees in an internal memo seen by the Guardian that AIP, the aircraft’s actual lessor, had taken over control of the airline’s fleet early on Tuesday.
Both 777 Partners and ourselves were taken aback by this. As soon as we have more information to give, we will post an update here. We are now weighing all of our alternatives,” he stated.
Jordan stated, “All first wave flights from all bases have been cancelled as a consequence of this.”
Inquiries concerning aircraft repossessions were not immediately answered by Bonza, 777 Partners, or AIP Capital.
According to earlier reports from The Guardian, 777 Partners was being sued in the UK for damages and unpaid aircraft leasing payments of about US$30 million (A$44.7 million). Even with the legal problems, 777 Partners is still trying to acquire Everton, an English football team. The English Premier League has not yet given its consent to the proposed takeover.
The Transport Workers Union (TWU) requested an immediate meeting with Bonza on Tuesday in order to talk about the ramifications for employees in light of “this difficult and uncertain time.”
Both the trapped passengers and the crew are going through a very trying moment. As this process progresses, Bonza needs to make sure that employees are informed and given priority, according to Michael Kaine, national secretary of TWU.
“There is little chance of survival for Bonza or any other airline trying to enter the Australian aviation market,” he stated. “This is an industry dominated by aggressive competition and unchecked corporate greed that will squeeze out any new entrant,” the statement reads, “despite speculation of issues behind the scenes at Bonza.”
In order to address concerns about competition, consumers, and workers, Kaine reiterated the demands of his union for a larger aviation commission.
Kaine remarked, “The aviation industry is at its knees.” “Airline fares have skyrocketed, but service standards have fallen.” Now that a more affordable airline is fighting to stay in the air, regional employment and communities are even more at risk of being cut off.
After a protracted certification process that prevented its planes from taking to the air, Bonza was launched in January 2023. However, during the past year, the airline has struggled with aircraft shortages, forcing it to cancel many flights.
It has drawn criticism for continuously opening up new lines and then closing some due to low traffic.
The airline was founded with the primary goal of serving the leisure market by providing direct flights between regional airports. It is based at Sunshine Coast Airport.
The airline uses bigger airports for operations, such as the Gold Coast and Tullamarine in Melbourne.
But it had been critical of the laws controlling the airport in Sydney. Due to these regulations, Bonza found it difficult to get landing and takeoff slots in order to begin offering services into and out of the profitable Sydney market.
1800 069 244 is the government’s Bonza Helpline number.
