More than 300 employees at failed budget airline Bonza have been told their roles have been officially terminated after they weren’t paid for more than two months.
Bonza entered voluntary administration and appointed accounting firm Hall Chadwick at the end of April after its aircraft lessor attempted to repossess its fleet due to unpaid debts of more than $115 million.
Hall Chadwick confirmed it had not received any offer to buy budget airline Bonza. Credit: Louis Trerise
Hall Chadwick partner Kathleen Vouris told Bonza’s stood-down workforce on Tuesday that the administrators had not received any offers for the budget airline, and all jobs would be terminated.
“While we are still having discussions with interested parties, employees need to be given certainty,” Vouris said.
“Employees need the option to go and seek alternative employment rather than be stuck with a company with no pay.”
The administrators are yet to liquidate Bonza, which means its employees aren’t able to access the government’s fair entitlements guarantee scheme.
‘Employees need the option to go and seek alternative employment rather than be stuck with a company with no pay.’
Kathleen Vouris, Hall Chadwick
Hall Chadwick won Federal Court approval to extend the administration period of the embattled airline in May, with a final creditors’ meeting scheduled for August.
Transport Workers Union national secretary Michael Kaine said the development was a blow to the aviation industry and regional communities.
“This is incredibly difficult news for Bonza employees who have received no pay for more than two months after the airline’s sudden collapse,” Kaine said.
“It’s a dark day for regional communities across Australia, which remain isolated through unaffordable or unavailable air travel.”
Hall Chadwick confirmed it was still assessing whether Bonza was trading while insolvent.
The last of the airline’s five purple Boeing 737-Max 8s left Australia last week, two months after Bonza chief executive Tim Jordan said he was blindsided by aircraft owner AIP Capital’s decision to repossess the fleet.
Disclosures to the corporate regulator from Hall Chadwick revealed the administrator held meetings with an executive at Bonza’s former private equity backer 777 Partners at least nine times between November 2023 and April.
The Australian Financial Review also obtained an email sent in March that revealed 777 Partners, its financier A-Cap, and Bonza chief financial officer Lidia Valenzuela knew there was a plan emerging to shut Bonza’s operations.
Bonza also received four notices of default for its leases but continued to sell tickets to flights until the morning its fleet was seized.
The airline owes more than $100 million to 60,000 creditors including staff, ground handlers, airports, and passengers. It owes 777 Partners $80 million, according to Hall Chadwick.
Jetstar and Virgin have offered to prioritise hiring Bonza staff for all vacancies. Jetstar said on Tuesday it had also extended its offer of free flights to affected Bonza customers until the end of this month.
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