Bonza tells stood down staff they will not be paid for April, as concern grows about future

Bonza’s administrators will continue to seek new funding for the budget airline after it was revealed staff won’t be paid for the past month.

The chances of budget carrier Bonza returning to the skies are looking even more grim, after it was revealed the airline cannot afford to pay staff wages for the past month.

In a statement late on Friday, administrator Hall Chadwick said they were continuing to seek funding from “key stakeholders” to enable Bonza to resume flight operations.

The accountancy firm has refused to put a dollar figure on Bonza’s liabilities but on Thursday night staff informed all but 21 of the 323 employees were being stood down.

In an even more devastating blow, employees learned their work in April would go unrewarded with Bonza unable to honour its monthly payroll due on May 5.

The development followed the repossession of Bonza’s small fleet of Boeing 737 Max 8s, which effectively grounded the airline, and forced it into voluntary administration.

CEO Tim Jordan told staff in an email on Tuesday the midnight repossession by leasing company AIP Capital took them by surprise.

But the administrator revealed Bonza directors had received “event of default notices” almost two weeks earlier, on April 17.

Such notices mean that in the absence of payment for the leased aircraft, legal action will commence.

Just before midnight on April 29, AIP Capital terminated the leases of the four aircraft and removed the flight manuals from the planes rendering them “unairworthy”.

It was unclear how many previous warnings Bonza may have been given by AIP Capital.

Hall Chadwick said they were continuing to work with “a number of key stakeholders to provide funding” so Bonza could resume flights.

Customers have been told Bonza is not in a position to issue refunds for cancelled flights.

A federal government spokeswoman indicated the matter was being closely monitored.

“Under the Corporations Act, it is the duty of company directors to determine when a company is insolvent and must stop trading,” the spokeswoman said.

“In instances where a company is found to have been trading while insolvent, serious penalties apply.”

Unions including the Australian Federation of Air Pilots and Flight Attendants Association of Australia have requested involvement in future meetings between the administrators and employees, and expressed concern about staff welfare.

FAAA federal secretary Teri O’Toole said the Bonza workers were “good people who believed in their airline”.

“This should not have happened,” Ms O’Toole said.

It’s understood the stood down employees have been encouraged to contact Centrelink, but were warned against taking new jobs with the suggestion their entitlements would be at risk if they did so.

The Transport Workers Union was incensed by the advice to employees, calling it “a disgraceful move by Bonza at a deeply distressing time for staff”.

TWU assistant national secretary Emily McMillan said the shock of Bonza falling into administration had barely subsided and workers were being forced to enter Centrelink queues.

“It’s appalling that Bonza has failed workers so spectacularly and that aviation workers are once again paying the price for a broken industry,” said Ms McMillan.

“These are hardworking people with bills to pay and families to feed. They are highly trained. This is a devastating blow and a cause for great worry in a cost-of-living crisis.

“Bonza’s administrators must strain every sinew to find the means to pay these workers urgently. There is no greater priority than this.”

A further update from Hall Chadwick was expected on Friday as discussions continued with AIP Capital and other industry participants in Australia and overseas.

“The largest consideration for these parties is the current status of the aircraft, which currently remain grounded,” Hall Chadwick said.

“Meetings between the administrators, the interested parties and the lessors are continuing daily. During this time, while the aircraft remain grounded, and there is insufficient cashflow and funding, the administrators are unable to recommence full operations.”

Bonza chief executive Tim Jordan described Tuesday as a “horrible day” after the airline was effectively grounded.

The firm said the extent of Bonza’s financial liabilities was “commercially sensitive” and subject to ongoing investigation and could not be disclosed at this time.

Hall Chadwick has previously warned customers with cancelled flights would not be receiving a refund anytime soon.

Flight cancellations have been extended through to the end of next Tuesday, May 7, and after that it would be depend on the status of the grounded fleet.

Instead, they advised customers to talk to their financial institution to discuss available options, or insurance providers in the event they have travel insurance for bookings.

Jetstar, Qantas and Virgin Australia were continuing to accommodate Bonza customers on flights free of charge where possible, with the three airlines carrying thousands of people caught up in the budget carrier’s collapse since Tuesday.

Bonza crew had also been invited to check out job opportunities with Virgin, Jetstar and Qantas, which have set up recruitment pages on their websites.

Bonza first began commercial flights in late January 2023 from the Sunshine Coast, and had expanded to hubs in Melbourne and the Gold Coast.

Three aircraft remain parked at the Sunshine Coast Airport and one each in Melbourne and on the Gold Coast.

Bonza’s owners 777 Partners, a Miami-based firm, is yet to comment on the airline’s apparent demise.

The firm held a 49 per cent stake in AIP Capital until recently.

Aviation industry insiders were not optimistic about Bonza’s chances of survival, unless a buyer was found.

There was a view that the budget carrier’s most valuable asset now was its AOC or air operators certificate.

Originally published as Bonza tells stood down staff they will not be paid for April, as concern grows about future