The future of low-cost airline Bonza is officially over: creditors voted on Tuesday to liquidate the company.
At a meeting with administrators Hall Chadwick, creditors of the new airline brought to an end a months-long saga that began in late April when the company first collapsed.
“Today the second creditors’ meeting was held, at which it was resolved to place Bonza Aviation into liquidation,” Hall Chadwick said in a statement on Tuesday afternoon.
‘The administration process is designed to maximise the chances of the company, or as far as possible, its business, continuing to exist.
‘Or if this is not possible, achieve a better result for the company’s creditors than would have been obtained if the company had been liquidated immediately.
‘The administrators carried out a broad sales campaign involving numerous investors, other airlines and companies in the tourism sector.
‘The administrators assisted these interested parties, allowing each of them to conduct due diligence to help formulate any offer.
‘Unfortunately, the administrators had not received any offers for the sale of the business or the company’s assets at the conclusion of the campaign.
‘The decision to put the company into liquidation now triggers the Fair Entitlement Guarantee, the Federal Government’s last resort scheme that provides financial assistance for unpaid employee entitlements in the event of insolvency.’
Low-cost airline Bonza was officially liquidated by administrators on Tuesday, months after its first bankruptcy (file image)
Bonza took off in January 2023, taking on giants Virgin and Qantas.
The airline offered regional Australians the chance to enjoy holidays to popular tourist spots or see loved ones in under-serviced cities and towns at ultra-low prices.
But less than 18 months later, Bonza went bust and became bankrupt, leaving thousands of passengers stranded.
Hall Chadwick was quick to determine whether Bonza could emerge from administration and fly again, but administrators were not given any binding offer for the troubled airline.
On June 11, the accounting firm laid off 500 Bonza workers and cancelled all future flights.
The Transport Workers Union said Tuesday afternoon that the workers are collectively owed an estimated $10.8 million in wages, severance pay and notice pay.
“The finality of the Bonza collapse is a sad event for Australia’s aviation industry, but it provides the certainty workers needed to access the Fair Rights Guarantee scheme for their owed entitlements, including wages for work completed in April,” TWU national secretary Michael Kaine said.
‘With the cost of living still falling, 500 families suffered a sudden loss of income and months of confusion about their future.
‘Rebuilding a sustainable aviation industry has never been more crucial for workers, passengers and the community.
The airline first flew in January 2023 with CEO Tim Jordan (pictured) promising unique flight routes without hitting passengers’ pockets.
According to aviation experts, multiple factors led to Bonza’s downfall.
First, Bonza did not compete in the Brisbane-Sydney-Melbourne market or what the aviation industry calls Australia’s “Golden Triangle.”
This meant that the company lost most of the money concentrated in the airline market.
“The Golden Triangle is very important because this is where most of the action happens and where the money is made,” Professor Rico Merkert, deputy director of the Institute of Transport and Logistics Studies at the University of Sydney Business School, told NewsWire.
‘In terms of seats, both Sydney to Melbourne and Sydney to Brisbane are in the top 10 busiest routes globally and when measured by revenue generated, Sydney to Melbourne is typically in the top three globally and was number one in 2023, ahead of London to New York.
Bonza also operated with only four aircraft.
Robyn Ironside, aviation writer for The Australian newspaper, says things are “not looking great” for Bonza passengers.
This comes amid the collapse of Bonza airline as it enters voluntary administration.
“They will probably find out more at a creditors meeting on Friday,” Ironside told Sky News Australia.
‘Administrators will speak directly to creditors, including customers.
“So far they have been told there are no refunds.”
Qantas, on the other hand, has more than 100.
TWU national secretary Michael Kaine (pictured) said the collapse was “a sad event for Australia’s aviation industry”.
With such a limited fleet, there was little room for error and schedules could be altered quickly.
The low-cost airline also leased Boeing 737-8s, which are large aircraft with 186 seats.
Professor Merkert said there may not have been “sufficient demand” to keep the fleet afloat.
“The Bonza story was great from a cost perspective as it was essentially about getting super cheap aircraft during the pandemic that were not only cheap from a capital cost perspective but also from an operating cost perspective,” he said.
‘Being brand new, they were sure to be popular with customers too, especially with such low fares and operating on routes no one else was operating, which was 84 percent of their routes.
‘And of course, Bonza optimized its cost structure to the extreme.
‘The problem is that this does not guarantee sustained profits.
‘Those planes had 186 seats and those seats want to be filled on as many flights as possible.