Smiles in this picture do not exist anymore for Bonza as they are no more associated with the carrier ! Indeed a sad day for the hundreds of workers, those have been left in limbo after they were sacked from the bankrupt budget Australian carrier Bonza without an access to their entitlements.
On Tuesday afternoon, Bonza administrator Hall Chadwick told the company’s 323 staff in a meeting that their employment would be terminated after it failed to find a buyer for the grounded carrier.
About 200 Bona Airline staff joined the online meeting, which also included the former CEO Tim Jordan. Staff had been informed they would not be able to access wages, which haven’t been paid since March, until after a second creditors meeting when creditors will vote on whether to push the company into liquidation.
Hall Chadwick says it is still talking with potential suitors but has come under fire for not liquidating the company sooner so workers can become eligible for government support.
As per the information provided, interested parties had been set a deadline of June 7 to submit a purchase proposal, but no binding offers were lodged.
“While this is not the news stakeholders wish to hear, the administrators must make a decision with respect to the stand down of the employees,” Hall Chadwick said in a statement.
“Furthermore, customers need certainty regarding the operation of future flights.
“As a result, the administrators have no option but to terminate all employees and cancel all future flights.”
Workers had been stood down without pay since April when the airline went into administration and its six Boeing 737 Max 8 planes were repossessed by lessors with debts of about $110 million.
Earlier, Transport Minister Catherine King had said that it is unlikely budget airline Bonza will make a financial comeback from this, and shot down hopes of a government bailout for the company.
According to the reports, it is understood that Bonza’s financial backer, Miami-based firm 777 Partners, have called restructuring specialists KordaMentha for financial advice about its ongoing operations in Australia.
Disclosures to the corporate regulator from Hall Chadwick revealed the administrator held meetings with an executive at Bonza’s former private equity backer 777 Partners at least nine times between November 2023 and April.
It's being said that Bonza also received four notices of default for its leases but continued to sell tickets to flights until the morning its fleet was seized.
Hall Chadwick said it continues to investigate the airline’s finances and will meet creditors to decide its future once completed.
Bonza's future still has to be determined. The administrator will convene a major meeting with creditors to decide its future once investigations are completed.
As things stand, Bonza is not in liquidation. Australia's Federal Court has given until 29 July for a buyer to be found.
If the company is placed into liquidation, employees would be entitled to payments through the federal government’s fair entitlements guarantee scheme.
For now, noticeable stand against liquidation should be Bonza’s possession of a valuable air operator’s licence, which is not transferable and would most likely be forfeited if the company went into liquidation.
Opposition transport spokeswoman Bridget McKenzie called on the government to ensure Bonza workers received their fair entitlements and accused Labor of overseeing a decline in competition in the aviation sector.
The Transport Workers’ Union said it was incredibly difficult news for Bonza employees and called on the federal government to establish a commission to rebuild the industry’s workforce.
“It’s a dark day for regional communities across Australia which remain isolated through unaffordable or unavailable air travel to remain connected with the nation,” the union’s national secretary Michael Kaine said.
Bonza operated as a low-cost domestic airline primarily servicing regional locations in Australia, following the operation style of Dublin based Ryanair.
Creditors were told at their first meeting the airline owed almost $77 million across two loans, almost $16 million to trade creditors and another $10 million to landlords.
Other debts include more than $5 million owed in staff wages and annual leave entitlements and $3 million to government authorities such as the Australian Taxation Office.
As a relief statement, Jetstar and Virgin Australia has offered to prioritise roles for workers who have lost their jobs at Bonza. Qantas and Jetstar are still offering free flights for all passengers, while Virgin will assess on a case by case basis.
While first of five left Australia on May 09, the last of the airline’s five Boeing 737-Max 8s left Australia last week, two months after Bonza chief executive Tim Jordan said he was helpless after aircraft owner AIP Capital’s decided to repossess the fleet.
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