All over for Bonza as creditors vote to liquidate

“The administration process is designed to maximise the chances of the company or as much as possible of its business continuing in existence; or if this is not possible, to achieve a better result for the company’s creditors than that which would result if the company had been immediately wound up,” said Hall Chadwick, who will now be appointed as Bonza’s liquidators, in a statement.

“The administrators ran an extensive sales campaign involving numerous investors, other airlines and companies from the travel industry. The administrators assisted these interested parties, allowing each party to conduct due diligence to help formulate any offer.

“Unfortunately, the administrators had not received any offers for the sale of the company business and/or assets at the conclusion of the campaign.”

In its report, released last Tuesday, Hall Chadwick had concluded the low-cost carrier, which has been grounded since April, had accumulated a loss of more than $133 million at the time its planes were seized by lessor AIP Capital.

The move to liquidate means that Bonza’s workers, who were all sacked in June, can now claim their unpaid wages under the government’s Fair Entitlements Guarantee (FEG) scheme.

According to TWU national secretary Michael Kaine, approximately 300 former Bonza staff members – who have not been paid since March – are collectively owed around $10.8 million for entitlements such as wages, redundancy, and pay in lieu of notice.

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“The finality of Bonza’s collapse is a sad event for Australia’s aviation industry, but brings the certainty workers needed to access the Fair Entitlements Guarantee scheme for their owed entitlements, including wages for work completed in April,” said Kaine.

“With cost-of-living still bearing down, 300 families suffered sudden loss of income and months of turmoil about their futures. Rebuilding a sustainable aviation industry has never been more critical for workers, passengers and the community.”

Kaine also reiterated the TWU’s call for more government intervention in the sector following Bonza’s collapse, saying regional areas will suffer as a result.

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

“Prior to administration, Bonza provided a lower-cost option for travellers and 35 routes connecting regional locations, 30 of which were unserved by any other airline.

“While aggressive market competition dominates the most lucrative routes, regional communities are left high and dry.”

In its report, Hall Chadwick, alongside Bonza CEO Tim Jordan and CFO Lidia Valenzuela – both directors of Bonza – appeared to at least partially blame the airline’s parent company, Miami-based investment firm 777 Partners, with Hall Chadwick saying 777 undercapitalised the business.

“The funding advances from 777 Partners were paid sporadically, delayed and were ultimately insufficient for the level of funding required to adequately maintain the Company’s operations,” the administrator wrote.

“Whilst 777 Partners did provide funding, the funding was insufficient for the level of debt incurred, which continued to increase, particularly from November 2023 to the date of our appointment.”

The administrator also suggested last week that Bonza may have been trading while insolvent, claiming directors were possibly continuing to accept bookings and incur debts on behalf of the company despite not knowing whether Bonza had adequate funding to keep flying.

Hall Chadwick said it will continue to investigate Bonza’s affairs during the winding-up.

“The liquidators will now continue with their investigations into the Company’s business and affairs and report findings to the Australian Securities and Investments Commission (ASIC) in due course,” the liquidator wrote.

“The liquidators will then consider any future action and claims that are able to be pursued for the benefit of creditors.”