Industry insiders reveal how it all went wrong for besieged budget airline Bonza

From sweetheart deals to ignoring major booking platforms, industry insiders lift the lid on how Bonza hit administration, leaving thousands of passengers stranded.

• Qantas’s job offer to Bonza crew

Besieged budget airline Bonza has been plunged into voluntary administration and thousands of passengers left stranded after a day of drama for the floundering operator.

As airline management and administrators Hall Chadwick attempt to pick up the pieces, industry insiders said Bonza’s decision to forego traditional online travel platforms in favour of their own booking app had cost the airline thousands of customers.

After weeks of speculation about Bonza’s future, the airline cancelled flights across the country on Tuesday after a late-night breakdown of leasing agreements with the aircraft owners.

Late Tuesday it was confirmed the airline had been placed in voluntary administration at the hands of national business advisory firm Hall Chadwick, with all flights grounded until at least Friday as moves were made to repossess the leased aircraft.

The move is a massive blow to the Queensland tourism industry as the Sunshine State is Bonza’s biggest market with flights to 11 airports across the state.

Bonza airline CEO Timothy Jordan has vowed to see a way forward. Picture Lachie Millard

Bonza CEO Tim Jordan vowed “to determine a way forward” for the airline, apologising to customers across Australia’s east coast caught out by mass cancellations.

Industry insiders told The Courier-Mail that Bonza’s decision to ignore major online booking platforms such as Flight Centre and Webjet in favour of having customers book directly via a mobile phone app had backfired by depriving them of thousands of potential customers.

Airlines typically pay a substantial fee to a service known as the Global Distribution System which ensures their schedules are filtered through to online booking platforms, but Bonza management baulked at the move, reasoning they would save money by controlling reservations through their own app.

Conversely, commissions paid to online travel sites typically amount to a few dollars per booking on domestic flights – often less than $10.

“They have saved a few dollars here and there and they wanted to be a bit of a market disruptor, but they probably would have made an extra 15 per cent revenue by being exposed to the much bigger audience on those websites,” said an industry insider.

As revealed by The Courier-Mail on the weekend, Bonza was understood to be struggling to reach new agreements with airports over the charges and taxes required for take-offs and landings, with calls on Tuesday for a complete overhaul of Australian aviation policy.

Airport charges have been another major sticking point for Bonza with airlines already dealing with rising costs for fuel and onboard supplies.

Passenger Tara Thompson was left grounded at Sunshine Coast Airport after Bonza’s horror day. Pictured: Patrick Woods.

Bonza’s “sweetheart deals”, which offered major concessions on airport charges, had been due to expire at a number of airports, leaving the operator facing the prospect of stumping up significantly higher costs.

Coincidentally, the Australian Competition and Consumer Commission Airport Monitoring Report (2022-23) was also released on Tuesday, with calls for reform to aviation policy to “address the imbalance of power in commercial negotiations between airports and airlines.

Airlines for Australia & New Zealand Chairman (and former chair of the ACCC), Professor Graeme Samuel AC, said airlines were often left with little room to move in airport negotiations.

“When negotiations break down – with disputes over prices and/or services – there is simply no mechanism for airlines to enforce the clause in the Aeronautical Pricing Principles for referring disputes to independent commercial mediation or arbitration,” he said.

“The impact of high – and growing – airport charges has again been highlighted in recent media concerning Bonza.

“When the airline launched in 2022, their CEO cited airport charges as its “single largest cost.”

“(Reform) would simply provide a more level playing field for airlines to negotiate these costs.”

In a statement, Mr Jordan said the airline was “working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market.”

Passengers Mareike Crawford and her family were left grounded at Sunshine Coast Airport. Picture: Patrick Woods.

Late Tuesday, Hall Chadwick also issued a statement confirming the Bonza fleet would remain grounded up to and including Thursday and customers with bookings over the next few days should not proceed to airports.

“The discussions regarding ongoing trading are occurring over the forthcoming days and the Administrators will be in a position to update all stakeholders as the matter progresses,” the statement said.

Queensland Tourism Minister Michael Healy said the appointment of administrators was “obviously concerning”.

“We recognise how important healthy competition in the aviation sector is to not just tourism, but the broader economy,” he said.

Tourism and Events Queensland CEO Patricia O’Callaghan said the airline’s fall from grace was “disappointing”.

“Bonza services were a welcomed announcement for Queensland’s tourism industry, adding critical capacity and competition to the aviation sector,” she said.

“The uncertainty surrounding Bonza is disappointing and it is important they work through the required processes as quickly as possible to provide certainty to impacted passengers and the broader travel industry.”

Queensland Tourism Industry Council CEO Brett Fraser said the loss of any airlines would make consumers worse off.

“Tourism in Queensland depends on maintaining a robust and competitive aviation sector,” he said.

“Having fewer airline routes and airlines operating will have a negative impact on the visitor economy.”

Bonza’s arrival on the Gold Coast was a welcome addition to the Glitter Strip when it was announced late last year, but it has been a source of concern almost ever since, with delays over approval from the Civil Aviation Safety Authority blamed for a string of cancelled flights and delays to new routes.

Bonza Flight attendants (left) Jade Lankester (front) Jasmin Elliott Justis Adams and Emma McBreen (are right big hand) at Sunshine Coast Airport pic Peter Wallis

Experience Gold Coast CEO John Warn was equally disappointed with the latest chapter in the Bonza saga, but said he was focused on bringing new airlines to the Glitter Strip.

“We are committed to advancing connectivity and securing new airline partnerships together with both Gold Coast and Brisbane Airports, the City of Gold Coast and the Queensland Government,” he said.

Bonza passengers were blindsided by the cancellation of flights on Tuesday morning with one Victorian family forced to fork out thousands of dollars to return to Melbourne on Qantas from the Sunshine Coast.

“We didn’t receive any message about how we were going to get home, we just quickly panicked and purchased a return flight through Qantas to Tullamarine (Melbourne) Airport, which for us that one flight cost $2,100, which is quite a lot of money,” said Mareika Crawford.

“We received a message saying the flight was cancelled and then to have more messages trickling through about what was happening on twitter (sic) and the news channels, not from the company directly was probably the hardest pill to swallow.”

A national hotline has been established for passengers affected by the sudden grounding of the Bonza fleet, while Virgin Australia was quick to offer free flights for affected customers.

Passengers are also advised to reclaim refunds through their banks if flights were paid for with credit cards.

· National hotline for affected travellers 1800 069 244

· Hall Chadwick customer number 03 8678 1600

Additional reporting Hayden Johnson