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Australian Airline Bonza On the Brink of Collapse as Flights Suddenly Suspended and Carrier Enters Administration

Australian Airline Bonza On the Brink of Collapse as Flights Suddenly Suspended and Carrier Enters Administration

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Australia’s newest airline, Bonza Aviation, was on the brink of collapse on Tuesday evening after the carrier suddenly suspended all flights before filing to enter voluntary administration with the Australian Securities and Investment Commission.

Bonza first emerged during the pandemic in December 2021 with plans to take on Australia’s two dominant domestic airlines, Qantas and Virgin Australia, with a new low-cost model using Boeing 737MAX aircraft.

Backed by the mysterious Miami-based private equity firm 777 Partners, Bonza Aviation received its operating licence in January 2023, and the airline started operating just a few weeks later from its base in the Sunshine Coast.

On Tuesday morning, however, the airline suddenly and unexpectedly cancelled all of its flights as rumours started to emerge that aircraft lessors had moved in to repossess aircraft over missed payments.

On it’s website, the airline posted a short statement, which read: “Bonza has temporarily suspended services due to be operated today (Tuesday 30th April), as discussions are currently underway regarding the ongoing viability of the business.”

“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 domestic aviation market.”

Thousands of passengers have been left stranded with the airline unable to rebook them on alternative flights as talks continue to see if the carrier can avoid going under.

By Tuesday night, it was revealed that the airline had entered voluntary administration which may allow Bonza to reorganise its debts and potentially carry on flying.

Bonza’s business model meant that it primarily targeted underserved point-to-point routes with the intention that it wasn’t directly competing with Qantas or Virgin Australia.

As a result, passengers may find it difficult to find alternative flights to get to their destinations. Qantas said on Tuesday that it would provide space available seats to Bonza customers free of charge, but the airline only has six overlapping routes through its QantasLink and Jetstar subsidiaries.

Virgin Australia also said it would support stranded Bonza passengers with free space-available seats.

Matt’s take

Bonza’s ambitious plans to take on Australia’s dominant domestic duopoly raised eyebrows from the very start, and many observers questioned whether the airline had the funding necessary to survive in one of the toughest aviation markets in the world.

This isn’t the first time that Bonza has faced difficulties, although it is the most serious. Last July, Bonza was forced to cull several routes and drawback frequencies on a number of others as the airline looked to shore up its finances.

Its private equity backer, 777 Partners, also owns Canada’s Flair Airlines, another low-cost airline that has faced its own financial difficulties, including having several aircraft repossessed over missed lease payments.

Voluntary administration may give Bonza the opportunity to reorganise and continue as a viable airline, but staffers claim it’s over for the airline. Bonza’s story could well be nearing its conclusion.

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