Going under Down Under

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Passengers stranded as Australian airline Bonza enters administration

The low-cost carrier has only been operating flights in Australia since 2023

Tue Apr 30, 2024 - BBC News
By Hannah Ritchie & Simon Atkinson

Australia's newest budget airline has gone into voluntary administration, after abruptly cancelling all of its flights on Tuesday.

Bonza's financial woes have left thousands of passengers stranded around the country.

Operating since last year, the carrier had been the first to launch in Australia since 2007.

Aviation remains one of the nation's most concentrated industries, dominated by Qantas and Virgin Australia.

"We apologise to our customers who are impacted by this and we're working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian aviation market," Bonza said in a statement.

The company has appointed Hall Chadwick as voluntary administrators for its operating and holding company, according to documents filed with Australia's corporate regulator.

Bonza's eight planes - a Boeing 737 Max fleet - were repossessed by creditors on Tuesday, according to local media. The airline has not confirmed the claim.

Passenger Mel Watkins, who was due to fly to Launceston for a family holiday, told the Australian Broadcasting Corporation (ABC) that she was "absolutely shattered" by news her flight had been axed.

"I thought it's an Australian airline, and we'd be better off supporting a small company, but it turns out no," she said.

The federal transport department set up an emergency help hotline for passengers on Tuesday, after planes were cancelled across Queensland and Victoria.

Qantas Group and Virgin Australia - which account for 95% of the nation's domestic aviation market - each offered to assist anyone stranded mid-journey.

Based in Queensland's Sunshine Coast, Bonza launched in 2021, promising low-cost fares and a suite of new domestic destinations.

After delays with regulatory approval, it finally took to the skies in 2023 but aircraft shortages and low patronage saw it slash several routes in quick succession.

Those setbacks, combined with its inability to secure access to take-off and landing spots in the lucrative Sydney market, quickly sparked speculation over its future.

Australia's main transport union is now seeking an urgent meeting with the airlines leadership to discuss how the sudden closure will impact workers.

"Bonza must ensure staff are prioritised and informed as this process plays out," the national secretary of the transport workers union, Michael Kaine said, according to the Guardian.

Mr Kaine also criticised the "unchecked corporate greed" in the aviation industry that's led to higher fares and warned that any carrier attempting to break into the market "has little chance of survival".

[Airband]

All in the family...

FLAIR REPORTEDLY SPLITS FROM 777 PARTNERS AS BONZA SAGA CONTINUES

737 MAX 8 operated by Bonza’s Canadian sister airline, Flair

Thu May 02, 2024 - Australian Aviation
By Jake Nelson 

Canadian low-cost carrier Flair appears to have divorced itself from parent company 777 Partners as its sister airline Bonza attempts to fight its way out of administration.

777 Partners, which is believed to have held around 24 per cent of Flair, has seen its stake reduced to almost nothing, according to sources cited in the Australian Financial Review. The Miami-based venture capital firm is also a part owner of Bonza, which entered voluntary administration this week.

An unnamed “affiliate of Flair’s largest senior lender” is acquiring a portion of 777’s stake, the airline said, as well as providing “new non-binding debt funding”.

“We are excited about this strategic evolution and the new financial commitment,” said Stephen Jones, CEO and President of Flair Airlines.

“We are grateful for their support as we chart the course for continued growth.”

Australian Aviation this week reported that 777 Partners paid the equivalent of $30.9 million AUD to Premier League club Everton hours after the Bonza’s fleet was repossessed. 777 Partners has been attempting to buy Everton since at least September, but questions have repeatedly been raised about its ability to close the deal.

The firm earlier this year faced legal action from aircraft lessors over three Flair 737 MAX 8s and one 737-800 that were repossessed last March over unpaid fees.

Three 737 MAX 8s and one 737-800 leased to Flair from a trio of Ireland-based lessors were seized last March, which reportedly resulted in 777 Partners sending planes that had been earmarked for Bonza to Flair to make up the shortfall.

As reported in The Guardian, the lessors, Corvus Lights Aviation, MAM Aircraft Leasing 4 and Columba Lights Aviation, were seeking US$28.5 million from the investment firm, which includes interest, lost income, repossession and reconfiguration costs, and damages for breach of contract. They claimed that 777 Partners had been ignoring their demands for payment.

Up until it entered administration, Bonza was flying its own aircraft from the Gold Coast, with both its planes leased from Flair otherwise occupied.

The two wet-leased Flair 737 MAX 8s, C-FLKC and C-FLHI or ‘Matilda’ and ‘Bruce’ respectively, shifted to a dry-lease arrangement, with the intention they would be operated by local crews from the Gold Coast.

Matilda had returned to North America to operate Flair flights, while FlightRadar data showed Bruce had not flown commercially since the end of February as it awaited recertification by CASA to fly under an Australian registration number.

Bonza had difficulties launching numerous routes from its Gold Coast base late last year, with delays in CASA approval for its wet-lease agreement with Flair pushing back the start date to 19 December, though some services using Bonza’s own planes had commenced in November.

Bonza administrators Hall Chadwick have said the airline will not fly again until at least next Tuesday.