Bonza joins ranks of failed airlines after creditors vote to liquidate

Bonza has joined the ranks of Ansett, Compass, Tigerair and Air Australia after creditors voted in favour of liquidation.

Budget carrier Bonza has officially joined the list of failed Australian airlines, after creditors voted in favour of liquidating the debt-laden company.

The vote was taken at the second creditors meeting held by ­administrator Hall Chadwick, with 35 votes in favour of liquidation and six against. The result signalled an end to more than two months of uncertainty for Bonza’s 323 employees who will be able to access more than $10m in wages and leave entitlements through the federal government’s fair entitlements guarantee (FEG) scheme.

Staff had not been paid since March, with the airline’s collapse on April 30 occurring just before their monthly pay cycle.

A statement from Hall Chadwick said the administrators ran an “extensive sales campaign” involving many investors, other airlines and companies from the travel industry. Despite the initial interest, no offers were received for the sale of Bonza and/or its ­assets, the statement said.

Hall Chadwick was appointed as voluntary administrators when aircraft lessor AIP Capital terminated the leases on Bonza’s small fleet, effectively grounding the 15-month-old airline.

All five aircraft were then removed from Australia, ending hopes of returning the purple thumbs-up livery to the skies.

A creditor’s report showed Bonza had accumulated losses of $133.5m since March 2022, including $80m between July 1 last year to April 30, and appeared to be trading insolvent from as early as March 1. However a statement from chief executive Tim Jordan and chief financial officer Lidia Valenzuela included in the report, claimed “Bonza was progressing positively towards being cash positive late in 2024”.

“Unfortunately for our Bonza team, our customers, our partners and the communities we serviced across Australia, that didn’t get an opportunity to come to fruition owing to the under capitalisation of the business and the consequential repossession of our aircraft,” they said.

Bonza aircraft were repossessed on April 30, and then taken out of the country be lessor AIP Capital. Picture: Mark Stewart

The report noted that Bonza required external funding from US owners 777 Partners for the duration of its operations and did receive loan funding amounting to $77.8m.

“However the funding advances from 777 Partners were paid sporadically, delayed and were ultimately insufficient for the level of funding required to adequately maintain Bonza’s operations,” the report said.

Unions representing Bonza workers described the decision to liquidate the airline as sad but not unwelcome, given it delivered much needed certainty to unpaid employees.

Flight Attendants Association of Australia industrial relations manager Steven Reed said the workers could now get on with ­accessing their entitlements.

“We’re very sad that another airline, particularly one servicing regional Australia has failed and we absolutely believe the federal government needs to hold a proper and fulsome inquiry into aviation in Australia because it’s part of the essential national transport infrastructure,” Mr Reed said.

Transport Workers Union ­national secretary Michael Kaine said the vote to liquidate was the “bittersweet news Bonza workers had been waiting for”.

“The worst of this news is the hopelessness of reconnecting ­regional Australia without intervention from a regulatory body,” Mr Kaine said.

Originally published as Bonza joins ranks of failed airlines after creditors vote to liquidate