Bonza creditors vote to liquidate airline in meeting with administrators

An Australian airline that only launched in January 2023 is officially dead and dusted, with creditors making a final decision on its future on Tuesday.

The future of budget airline Bonza is officially over, with creditors voting to liquidate the company.

At a meeting with administrators Hall Chadwick on Tuesday, the upstart airline’s creditors ended the months-long saga that kicked off in late April when the company first collapsed.

“The second meeting of creditors took place today, where it was resolved to place Bonza Aviation into liquidation and that Richard Albarran, Kathleen Vouris, Brent Kijurina and Cameron Shaw be appointed as liquidators,” Hall Chadwick said in a statement on Tuesday afternoon.

“The administration process is designed to maximise the chances of the company or as much as possible of its business continuing in existence, or if this is not possible, to achieve a better result for the company’s creditors than that which would result if the company had been immediately wound up.

“The administrators ran an extensive sales campaign involving numerous investors, other airlines and companies from the travel industry.

“The administrators assisted these interested parties, allowing each party to conduct due diligence to help formulate any offer.

“Unfortunately, the administrators had not received any offers for the sale of the company business or assets at the conclusion of the campaign.

Creditors voted to liquidate Bonza on Tuesday. Picture: Supplied

“The decision to put the company into liquidation now triggers the Fair Entitlements Guarantee, the Federal Government scheme of last resort that provides financial assistance for unpaid employee entitlements in insolvency.”

Bonza launched to the skies in January 2023, taking on behemoths Virgin and Qantas.

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.

Hall Chadwick scrambled to determine whether Bonza could emerge from administration and re-enter the skies, but administrators did not receive any binding offers for the embattled airline.

On June 11, the accountancy firm terminated 500 Bonza workers and cancelled all future flights.

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.

TWU National Secretary Michael Kaine speaks after Bonza announced its collapse. Picture: NewsWire / John Appleyard

“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,” TWU national secretary Michael Kaine 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.”

Multiple factors led to Bonza’s downfall, according to aviation experts.

For one, Bonza did not compete in the Brisbane-Sydney-Melbourne market or what the aviation industry refers to as Australia’s “Golden Triangle”.

This meant the company lost out on the airline market’s most concentrated money pot.

“The Golden Triangle is so important because this is where most of the action happens and where the money is being made,” Professor Rico Merkert, deputy director at the Institute of Transport and Logistics Studies at the University of Sydney Business School, told NewsWire.

“In terms of seats, both Sydney to Melbourne and Sydney to Brisbane are in the top 10 of the busiest routes globally and when measured in revenues generated, Sydney to Melbourne is typically among the top three in the world and was No.1 in 2023 in front of London to New York.

Bonza also operated with just four aircraft.

By contrast, Qantas has more than 100.

With such a limited fleet, there was little room for error and timetables could quickly become scrambled.

The low-cost carrier also leased Boeing 737-8s, which are large aircraft that boast 186 seats.

Professor Merkert said there may not have been “sufficient demand” to keep the fleet afloat.

“The Bonza story was great from a cost perspective, which was essentially getting super cheap aircraft during the pandemic that were not only cheap from a capital cost but also operating cost perspective,” he said.

“Being brand new, surely, they would be popular with the customers, too, especially at such low fares and being operated at routes that no one else did, which was 84 per cent of their routes.

“And sure, Bonza optimised their cost structure to the extreme.

“Problem is, this does not guarantee sustained profits.

“Those aircraft had 186 seats and those seats want to be filled on as many flights as possible.

Originally published as Bonza creditors vote to liquidate airline in meeting with administrators