In a sad development, the future of Australian low cost carrier Bonza is officially over as of today, as the creditors have voted to liquidate the company.
At a meeting with administrators Hall Chadwick on Tuesday, the airline’s creditors ended the months-long saga that kicked off in late April when the company first collapsed.
Promising a Ryanair style predatory pricing, Bonza launched to the skies in January 2023, taking on the business models of Virgin and Qantas.
However, in April this year, due to funding issues along with lessor disagreements, Bonza entered into voluntary administration after abruptly cancelling flights across Australia, stranding hundreds of domestic passengers.
Bonza's administrators had run a sales campaign over recent months involving investors, other airlines and travel companies, but had not received any offers for the sale of the business and/ or its assets at the end of that campaign period.
The airline offered Australians in the regions a chance to snatch a holiday to tourist hotspots or see loved ones in under-serviced cities and towns at ultra-low prices. But less than 18 months later, Bonza went bust, collapsing into administration with thousands of passengers left stranded.
TWU warns regional Australia won't reconnect with the rest of the country without a Safe and Secure Skies Commission.
TWU national secretary Michael Kaine said the vote meant workers could access their entitlements.
“The finality of Bonza’s collapse is a sad event for Australia’s aviation industry but brings the certainty workers needed to access the Fair Entitlements Guarantee scheme for their owed entitlements, including wages for work completed in April,” he said.
“With cost-of-living still bearing down, 500 families suffered sudden loss of income and months of turmoil about their futures.
“Rebuilding a sustainable aviation industry has never been more critical for workers, passengers and the community.”
In June, 323 employees of Bonza were told their employment would be terminated. Workers are collectively owed an estimated $10.8m in wages, redundancy and pay in lieu of notice, the Transport Workers Union said on Tuesday afternoon.
After the Bonza workers were terminated on 11 June, Australian government's Fair Entitlements Guarantee scheme for workers to claim owed entitlements could not be enlivened until the company entered liquidation, which has now occurred.
Bonza operated with just four aircraft.The low-cost carrier had leased Boeing 737-8s, which are large aircraft that boast 186 seats. Bonza provided a lower-cost option for travellers and 35 routes connecting regional locations, 30 of which were unserved by any other airline.
Bonza never turned a profit in its tenure of operation. It lost $80 million this financial year on top of a $50 million loss last financial year, and owes the tax office about $2 million.
Owing to these scenario, dreditors started issuing demands for immediate payment of outstanding invoices from as early as July 2023. The Commonwealth Bank notified Bonza in June 2023 that it was ceasing the banking relationship.
Earlier, Hall Chadwick said that the Australian directors, CEO Tim Jordan and CFO Lidia Valenzuela, co-operated with the administrators while the two American directors from 777 Partners did not. It was obvious that Bonza was reliant on its primary promoter 777 Partners for funding.
A media statement from administrators Hall Chadwick on Tuesday said the liquidators of the company Richard Albarran, Kathleen Vouris, Brent Kijurina and Cameron Shaw, would continue investigations into the company's business and affairs and report findings to the corporate regulator in due course.
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