The low-cost airline Bonza entered voluntary administration on Tuesday, after abruptly cancelling all of its flights following the repossession of its entire fleet that caught its CEO by surprise.
Passengers were left stranded at a handful of airports when Bonza “temporarily suspended” all services due to be operated on Tuesday with no notice, as the airline’s owners considered the viability of the business’ future.
On Tuesday, Bonza appointed firm Hall Chadwick for the administration process of its operating and holding company, documents filed with the Australian Securities and Investments Commission (Asic) showed.
“Discussions are currently under way regarding the ongoing viability of the business,” Bonza’s chief executive, Tim Jordan, said in a statement.
“We apologise to our customers who are impacted by this and we’re working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market.”
Bonza’s board held an emergency meeting on Tuesday afternoon to discuss the airline’s next options.
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Shortly after the cancellations were reported, the transport minister, Catherine King, said her department had contacted Bonza and that “our expectation is that they keep passengers informed of their options and their consumer rights”.
The transport department opened a hotline on Tuesday morning for stranded Bonza passengers. The hotline number is 1800 069 244.
“I have spoken to Qantas and Virgin CEOs this morning and both airlines stand ready to assist stranded passengers needing to get home,” King said.
King, speaking later on Tuesday from Melbourne, did not answer questions about whether Bonza had asked for a government bailout, but said “we’ll await to hear what the Bonza board is deciding”.
“It’s always really tough for a new entrant. So, we are a small market, despite the fact we are amazing travellers and we do want to travel everywhere and all the time. But we are a small market and it is always very difficult for new entrants,” King said.
Meanwhile, aviation sources told the Guardian that Bonza’s fleet of Boeing 737 Max 8 aircraft had been repossessed.
Bonza’s private equity owners, the US firm 777 Partners, had owned the airline’s fleet of Boeing 737 Max 8 planes. The parent company also part owns the Canadian low-cost carrier Flair and leases its aircraft assets between the airlines.
Flair had some of its aircraft repossessed at short notice in 2023.
Bonza had been operating two aircraft wetleased from Flair in recent months, in addition to its fleet of four aircraft.
One of the planes Bonza had been leasing from Flair appears to have returned to the Canadian carrier and was flying routes in North America on Monday.
On 9 April, AIP Capital – an investment manager that includes aviation assets such as aircraft and which had majority owned 777 Partners’ fleet of aircraft in a 51%-49% split – announced the formation of a new holding company, Phoenix Aviation Capital.
When announcing its launch, Phoenix said it had “a definitive agreement to acquire the rights, interests and obligations of a portfolio of 30 737-8 aircraft from 777 Partners”.
In an internal note seen by the Guardian, Jordan acknowledged to staff that the airline’s fleet was repossessed by AIP, the effective lessor of the aircraft, on Tuesday morning.
“This was a surprise to both ourselves and 777 Partners. We are currently assessing all options and will provide an update here just as soon as we have more information available to share,” he said.
“As a consequence of this all first wave flights from all bases have been cancelled,” Jordan wrote.
Bonza, 777 Partners and AIP Capital did not immediately respond to questions about aircraft repossessions.
The Guardian has previously reported that 777 Partners were being chased in court in the UK for almost US$30m (A$44.7m) in unpaid aircraft leasing fees and damages. Despite the legal issues, 777 Partners is currently attempting to take over English football club Everton. The proposed takeover is awaiting approval from the English Premier League.
On Tuesday, the Transport Workers Union (TWU) was seeking an urgent meeting with Bonza to discuss the implications for workers during “this difficult and uncertain time”.
“This is an extremely distressing time for workers and stranded passengers. Bonza must ensure staff are prioritised and informed as this process plays out,” the TWU national secretary, Michael Kaine, said.
“Bonza and any other airline attempting to enter the Australian aviation market has little chance of survival,” he said. “Despite speculation of issues behind the scenes at Bonza, this is an industry dominated by aggressive competition and unchecked corporate greed that will squeeze out any new entrant.”
Kaine echoed his union’s calls for a broader commission into aviation to address competition, consumer and worker issues.
“Aviation is an industry on its knees,” Kaine said. “Service standards have plummeted while air fares have gone through the roof. Regional jobs and communities are now at further risk of being cut off as a more cost-effective airline struggles to stay in the air.”
Launched in January 2023 after a lengthy accreditation process during which its planes could not fly, Bonza has struggled with aircraft shortages and was forced to cancel several routes over the past year.
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It has come under fire for repeatedly expanding to new routes before cutting some because of low patronage.
The airline operates out of a base at Sunshine Coast airport and was set up to primarily serve the leisure market through direct routes between regional airports.
The airline operates out of larger airports, including Melbourne’s Tullamarine and the Gold Coast.
However, it had been critical of the laws governing Sydney airport. Those laws meant Bonza struggled to gain access to take off and landing slots to launch services in and out of the lucrative Sydney market.
The government’s Bonza hotline is 1800 069 244.
