By Anne Hyland
Last June, Manish Raniga, a director of the global private investment firm 777 Partners that owned cheeky low-cost airline Bonza, sat before federal politicians at a Senate standing committee on economics. The committee’s focus was on creating new businesses, and promoting competition and dynamism within the Australian economy.
“We’ve got access to financing to provide Bonza with a level of certainty and a level of competitiveness in order for it to then be able to afford low fares into the market,” he told the committee. “That’s not necessarily available all the time, every time.”
But he said a firm like 777 Partners had the “means” to manage “the long-term arc” required to operate in Australia’s cut-throat aviation market.
Bonza flights across Australia were suspended after the company was placed into voluntary administration.Credit: Eamon Gallagher
In September, Raniga told Bloomberg on the sidelines of an aviation conference that 777 Partners’ goal was to create a worldwide network of carriers across domestic and short-haul international routes. He explained that planes could be moved between the different airlines when capacity waxed and waned depending on seasonal demand.
The following month, Raniga gave another interview to an aviation journal, saying 777 Partners’ plan for Bonza was to “punch well above its weight compared to other businesses that are much larger in scale”.
On Tuesday, Bonza appointed a voluntary administrator. Its planes were repossessed, and thousands of stranded passengers’ travel plans were left in turmoil. The airline, which began operating last year, said it had temporarily suspended services.
Raniga wasn’t answering interview requests on why 777’s plan for Bonza to punch above its weight had turned into a punch in the nose.
Raniga wasn’t responding to interview requests on why 777 Partners’ plan for Bonza to punch above its weight had turned into a punch in the nose.
In the days or weeks before Bonza’s fleet was grounded, Raniga adjusted his LinkedIn profile to state that he was no longer chief executive of 777 Partners’ airline investments. He remains a director of the firm.
The problems at 777 Partners, which also has a $21.7 million shareholding in soccer team Melbourne Victory, are not limited to Bonza. (Bonza is a major sponsor of Melbourne Victory. The football club last year lost $7.6 million.)
Questions, too, have been raised about the health of the operations of 777 Partners, which was founded in 2015 by US financiers Josh Wander and Steve Pasko.
The Miami-based private investment firm invests in seven sectors, including sports, aviation and insurance. It has stakes in football clubs such as Italy’s Genoa and the Spanish team Sevilla, British basketball teams, a Canadian low-cost carrier, Flair, and a Bermuda-based reinsurance entity, 777 Re.
It has also gained a lot of attention recently with its protracted negotiations to buy English Premier League club Everton. In the past eight months, it has sought extensions to that deal as scrutiny has grown about its ability to raise the funds to complete it.
Passengers were forced to find alternative routes after Bonza planes were repossessed.Credit: Elke Mietzel
Attention has also been growing following a number of media reports that have questioned 777 Partners’ financial outlook.
In January, The Guardian reported that 777 Partners was being pursued for $US30 million ($46 million) in unpaid aircraft leasing fees and damages in the UK, relating to four planes leased to Flair Airlines, which is part-owned by 777. In 2023, four aircraft leased by Flair Airlines were reportedly repossessed due to outstanding fees.
In response to that lawsuit, 777 Partners vehemently denied the allegations, describing them as “frivolous”.
On its website, 777 Partners states it had orders for 214 Boeing 737-MAX planes. This would be an enormous financial outlay, given the sticker price for a single aircraft is $US100 million.
In February, 777 Re, the reinsurance entity of 777 Partners that offers reinsurance on life insurance and annuity business, had its rating downgraded to C-, or weak, signalling concerns about its financial stability and risk management practices.
One of the reasons cited for the downgrade was 777 Re’s “diminished ability to write new business while simultaneously planning to address existing liabilities”.
It was the second time in several months that the ratings agency AM Best had downgraded 777 Re’s outlook. It had earlier warned about the company’s exposure to various 777 Partners investments.
In other words, funds from the insurer had been used to bankroll a number of 777 Partners investments. “These concerns are heightened by uncertainty regarding the financial condition of 777 Partners LLC as it has not provided audited financial statements for the past two years,” AM Best wrote.
The problems at 777 Partners have been compounded by one of its backers, a US life insurer called A-Cap, founded by Kenneth King.
King has steered hundreds of millions of dollars into 777 Partners through reinsurance contracts and loans. Now, as A-Cap tries to cut its exposure and get control of some of 777 Partners’ assets, it has set in place a domino effect that has resulted in the aircraft repossessions that have left Bonza and its passengers stranded.
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