Bonza customers fire questions during first creditors meeting

The federal government says it won’t be helping Bonza, which owes 60,000 people more than $100m and Queensland isn’t keen either.

Bonza cabin crew are among 323 staff left out of pocket by the airline’s collapse.

The Queensland government has killed off hope that it could provide a financial lifeline to Bonza despite administrators telling creditors of the grounded airline that the state government was still considering its position.

Hall Chadwick conducted the first creditors’ meeting of the Bonza administration on Friday, revealing that the airline owed more than $115m, including almost $80m to owner 777 Partners.

Another $10.5m was owed to landlords, $16m to 120 trade creditors and $5.3m to employees.

Bonza also has debts with statutory authorities such as the Australian Taxation Office of almost $2.7m and owed aircraft leasing company AIP Capital $4.6m.

“The federal government has indicated it’s unlikely to be forthcoming with any financial incentives,” Hall Chadwick partner Richard Albarran said.

“The Queensland government is considering its position so hopefully there will be some assistance but we can’t say what that looks like. They want to know what’s the strategy for Bonza, who’s the purchaser – there’s a few things to be dealt with.”

But late on Friday a government spokesman killed any notion of help from Queensland saying their position was “the same as the federal government”.

Bonza appointed Hall Chadwick as voluntary administrator when AIP Capital terminated the leases on four Boeing 737 Max 8s just before midnight on April 29.

Creditors were told Hall Chadwick had tried to convince AIP Capital to return the aircraft to Bonza, but it was not willing to change its position.

However, the administrator said there were at least half a dozen “very interested parties” in Bonza – including investors, other airlines and companies from the travel industry.

“We are unable to provide further information as these discussions are commercially sensitive,” Mr Albarran said.

Bonza CEO Tim Jordan (centre) with members of the cabin crew at the first flight by the carrier from Melbourne to Toowoomba Wellcamp Airport.

“The administrators are continuing to work with these parties.”

He said options available to administrators at this stage were a sale of the airline or “deed of company arrangement” or liquidation – where the remaining assets were sold off.

Dozens of questions were submitted by creditors, including from customers, employees and other companies owed money by Bonza.

Most questions from customers concerned the refund of fares from cancelled flights, but Hall Chadwick was unable to provide any certainty they would ever see their money again.

Flights are so far only cancelled up until next Tuesday, May 14, and several customers asked whether they would be entitled to a refund if a flight were cancelled beyond that date.

Mr Albarran told them that was “a matter for them to decide” and an update on the cancellations would be issued next Tuesday.

Employees were given slightly more hope they might eventually be paid for April, when Mr Albarran assured staff they were the “first priority” in an administration process.

It was expected they could face a wait of two months or more unless the decision was made to liquidate Bonza which meant the government fair entitlements guarantee (FEG) would be triggered.

Mr Albarran said the scheme did not include superannuation entitlements.

He and fellow administrators were also questioned about whether Bonza was trading while it was insolvent, and why the airline continued to accept bookings as its financial position worsened.

“This will form part of our investigation whether directors breached directors’ duties under the Corporations Act by trading while insolvent,” he said.

“I can’t answer those questions at the moment; it’s part of our ongoing investigations.”

Further details were expected in a creditors’ report due out in a month.

About a dozen nominations were received for the Committee of Inspection, including from unions, 777 Partners, Airservices Australia, the Department of Employment, Bonza chief financial officer Lidia Valenzuela, Cairns Airport, Melbourne Airport, the ATO and Nauru Airlines.

A message to creditors from Bonza chief executive Tim Jordan was read out at the start of the meeting, reflecting on the airline’s short-lived operations.

He said Bonza realised his dream of democratising air travel in Australia, and since January 2023 the airline had carried almost one million customers to 22 destinations.

“It’s therefore very hard to balance this with how we find ourselves today,” Mr Jordan said.

“We are hopeful of a positive resolution for the future of Bonza. It is most appropriate today I apologise to our wonderful and dedicated Bonza team and partners who’ve supported us on this journey and the tens of thousands of customers who have made forward bookings. To each of you I would like to sincerely apologise.”

The Flight Attendants Association of Australia has set up a GoFundMe page for cabin crew, to help them meet their bills after going unpaid for a month.

Of the 323 staff, about 180 are cabin crew, and between 50 and 60 pilots – including some who endured the Virgin Australia administration in 2020.

Originally published as Bonza customers fire questions during first creditors meeting