Bonza vows to fight on after being placed into voluntary administration

Bonza has vowed to ‘fight this’ after its small fleet of aircraft was repossessed, forcing the budget airline into voluntary administration.

Bonza has pledged to “fight on” after being placed into voluntary administration following the repossession of its fleet of five Boeing 737 MAX 8s, with the corporate regulator to consider whether the airline traded while insolvent.

The early-morning seizure by aircraft leasing company AIP Capital took Bonza by surprise and caught the attention of the Australian Securities & Investments Commission, which indicated it would make its own inquiries as to whether the airline had traded while insolvent.

The crew of one aircraft, “Bazza”, was already on board in Melbourne when the direction came through early on Tuesday morning that the plane was not to depart.

The order was also relayed to air traffic control, and the aircraft was moved to the area near the Melbourne jet base – the same place where Ansett aircraft were stationed after that airline collapsed in 2001.

Many passengers were unaware of the situation until they arrived at airports on the Sunshine Coast, Gold Coast and Melbourne to discover their flights had been cancelled.

Even Bonza executives were caught out and scrambled to issue a public statement explaining the turn of events as a “temporary suspension of flights”.

A message to staff from chief executive Tim Jordan confirmed the 3am repossession order took the airline and its US owner, 777 Partners, by surprise.

In a separate post, Bonza chief operating officer Michael Young assured the airline’s 300 employees “things were happening to resolve the situation we’re in”.

“I cannot say much at this stage but suffice to say we are fighting this,” Mr Young wrote.

“I realise the uncertainty is gnawing away at everyone, this is natural. But we have an AOC (air operator’s certificate) which is valuable, we are safe and we have a product and network that ­people like and want.”

Hall Chadwick were appointed as administrators and said they were considering whether Bonza could continue to operate during the course of the administration.

“The company’s fleet is currently grounded pending discussions with relevant parties and key stakeholders. The grounding of the fleet is currently up to and including Thursday, May 2,” a statement from Bonza and Hall Chadwick said.

“Customers with bookings during this period are advised not to travel to the airport.”

ASIC chairman Joe Longo told a parliamentary hearing the regulator would be conducting its own inquiries into Bonza.

Also appearing before the hearing, ASIC executive director of enforcement and compliance Tim Mulally noted concerns around whether there had been “any insolvent trading”.

Mr Longo said: “What the corporate future is of this airline remains to be seen. We don’t have all the facts but we will be closely monitoring the situation to see what action we should be taking if any in the short term.”

Bonza’s novel approach to air travel included relaxed on-board service, Focker aircraft names such as Shazza and Bazza,a purple thumbs-up logo.

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The brainchild of Mr Jordan, Bonza was first mooted in late 2021 after 777 Partners came on board as the sole investor, with the promise of access to dozens of new Boeing 737 MAX 8s.

It was not the Miami firm’s first foray into aviation, with Canada’s troubled Flair Airlines also backed by 777 Partners.

The company maintains a diverse array of other investments, including a stake in A-League football club Melbourne Victory, and has conditional approval to buy Premier League club Everton.

Bonza began commercial flights from the Sunshine Coast in late January last year, and had grown its network to 34 regional routes.

The first signs of trouble emerged within six months when several routes were axed and flight bookings put on hold. Bonza rallied only to again run into problems in December.

Issues with aircraft deliveries and regulatory approvals saw dozens of flights cancelled over the Christmas holidays, creating discontent among customers.

As leasing costs climbed, fuel prices soared and discounted airport deals expired, financial pressure increased on Bonza, which typically charged between $50 and $100 a fare.

It all began to crumble two weeks ago, when leasing company AIP Capital announced a new platform called Phoenix Aviation Capital to acquire the “rights, interests and obligations of a portfolio of 30 Boeing 737-8s from 777 Partners”.

At the same time, reports emerged that 777 Partners had appointed KordaMentha to take a look at Bonza’s books – but Mr Jordan was unaware of any engagement.

Mr Jordan did not answer calls on Tuesday, but a statement issued by the airline said “discussions were under way regarding the ongoing viability of the business”.

Customers hit by Tuesday’s flight cancellations were promised full refunds.

Passengers caught up in the mayhem on Tuesday described the situation as a nightmare.

A hotline – 1800 069 244 – was set up for passengers.

Additional reporting: Mohammad Alfares

Originally published as Bonza vows to fight on after being placed into voluntary administration