Bonza administration at a ‘critical point’ as last plane leaves the country

Final offers for Bonza are due on Friday and with not a single aircraft left in Australia, administrators are looking if its insurance policy can cover any of the debts.

Bonza’s administrators have told creditors the next two days are “critical” in terms of a potential sale of the airline with interested parties given until the close of business on Friday to lodge offers.

Thursday’s meeting came after the last aircraft painted in the Bonza livery left the country, effectively erasing the purple thumbs up logo from the landscape.

“Sheila” registered VH-UJK was among five Boeing 737 Max 8s repossessed by lessor AIP Capital before midnight on April 29, which plunged Bonza into voluntary administration.

Since then, Bonza’s 323 staff have been stood down and informed they would not be paid for the month of April.

Customers of the airline have similarly been informed there was no money for refunds, as investigations continued into whether Bonza was trading insolvent.

A source who took part in Thursday’s confidential meeting of creditors said the tone was “not positive” and administrators Hall Chadwick indicated they were looking into an insurance policy to try to cover some of Bonza’s debts.

A representative of the federal government fair entitlements guarantee was present at the meeting, with the scheme now looking like the best chance of employees being paid.

In order to trigger the scheme, creditors would have to vote to liquidate Bonza, rather than accept a sale or deed of company arrangement (DOCA).

A further meeting was planned for next Tuesday June 11 to report back on any offers and determine next steps.

Hall Chadwick was last month granted an extension of the administration in the hope of finding a buyer for Bonza which now amounted to an air operators certificate, some contracts and computer equipment.

Bonza chief executive Tim Jordan has kept a low profile since the airline collapsed leaving staff and customers out of pocket.

Creditors were told last month the airline’s liabilities amounted to more than $115m including $5.3m owed to employees, and $76m owed to owner 777 Partners.

The Miami-based firm has its own financial woes, recently calling in B Riley Advisory Services to “rationalise the business and select the most profitable path forward for investments”.

777 Partners, headed by Josh Wander and Steve Pasko was also the subject of 17 lawsuits including one brought by London asset management firm Leadenhall Capital.

The case filed in a New York district court described 777 Partners as a “house of cards on the brink of collapse”.

It alleged the firm had borrowed USD$350m against assets it did not own, did not exist, or were promised to someone else.

Last month Hall Chadwick said 777 Partners had shown interest in restructuring Bonza but had not made a formal offer.

Bonza was the dream of CEO Tim Jordan who previously worked for Virgin Blue and Air Astana in Kazakhstan.

His plan to “democratise” air travel and provide a low cost option for residents of regional areas was met with scepticism from the start, particularly when it was announced 186-seat 737 Max 8s would fly routes most of which were not serviced by other carriers.

In its brief life, Bonza operated from three hubs on the Sunshine Coast, Gold Coast and in Melbourne flying to 21 destinations.

Mr Jordan has kept a low profile since the airline’s collapse, other than to apologise to staff and customers and express that the repossession of aircraft was a shock.

Originally published as Bonza administration at a ‘critical point’ as last plane leaves the country