iscover
Virgin has said it’s “saddened to hear” that Bonza has entered voluntary administration and reiterated its pledge to help stranded passengers get home.
“When Bonza started in Australia, Virgin Australia welcomed its launch because competition makes us all better and benefits consumers,” the airline said in a statement.
“Virgin Australia this morning offered to support any passengers stranded mid-journey by offering complimentary seats, where available, on Virgin Australia operated flights to the airport nearest their final planned Bonza destination.
“We are also offering support to the Bonza team members to help manage this challenging period.
“Bonza customers mid-journey are asked to approach their nearest VA representative or call Virgin Australia through its Guest Contact Centre on 13 67 89.”
Bonza entered voluntary administration on Tuesday afternoon, hours after suspending its flights nationwide.
An internal note sent by airline CEO Tim Jordan to staff, obtained by the AFR, confirmed that its aircraft had been repossessed by its lessor at 3 a.m., but the news came as a “surprise” to both Bonza and owners 777 Partners.
However, the development that administrators Hall Chadwick have taken over control opens up the possibility that the business or its assets could be recovered by a third party.
The extraordinary development followed a rash of speculation about the future of Bonza, with the airline earlier this month bluntly denying consultants KordaMentha had been brought in to advise the business after a report in The Australian Financial Review.
“KordaMentha has not been appointed as financial advisors to Bonza, or in any other capacity,” said Jordan at the time.
In its report, the AFR pointed to claims of financial strain at Bonza’s parent company, 777 Partners, which also owns its sister Canadian airline Flair.
777 Partners 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. There has also been speculation surrounding 777’s ability to complete a takeover of English Premier League football club Everton.
The airline also last week cut back on services from its third base at the Gold Coast, with some to fly as infrequently as one per week. Bonza is currently flying its own aircraft from the Gold Coast, with both its planes leased from Canadian sister airline Flair otherwise occupied.
The two wet-leased Flair 737 MAX 8s, C-FLKC and C-FLHI or ‘Matilda’ and ‘Bruce’ respectively, are shifting to a dry-lease arrangement and will be operated by local crews from the Gold Coast.
Matilda has temporarily returned to North America to operate Flair flights, while FlightRadar data shows Bruce has not flown commercially since the end of February as it awaits 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 Canadian sister airline Flair pushing back the start date to 19 December, though some services using Bonza’s own planes had commenced in November.
Speaking to the Australian Aviation Podcast shortly after the airline’s first anniversary of its inaugural flight on 31 January, Jordan said Bonza was “not so far away” from breaking even and aimed to be “well on the way” to profitability this year.
“We know that we wouldn’t exist without our investors. They absolutely jumped in,” he said.
“I spent 12 years looking for Australian investors, and we have an investor who can see the opportunity, but ultimately, they want to go on a journey towards a return on their investment, and 2024 is significant in that regard. So we’ve got to go on that journey because it’s important for us to do so.”
According to Jordan, “many people” could see the opportunity Bonza presented, though the airline had turned to overseas investors such as 777 Partners because locals were wary of the challenges posed by the Qantas-Virgin duopoly.
“Australia was the only market without an independent low cost carrier for the last decade, and of the 15 largest markets, Australia was the only one which didn’t have an independent low-cost operator, so they could see the big-picture strategic imperative for that,” he said.
“However, because of the lack of competition, the duopoly which effectively exists in Australia, many people said, ‘you will not be allowed to survive, let alone thrive, by incumbents’.”
