How Bonza went from boom to bust

“I’d like us to be accepted and well regarded in the industry, to be quite honest, and a positive reference point – one that we as the Australian aviation community can spruik in other parts of the world with a sense of pride. That may be getting a little bit ahead of ourselves, but it’s a good ambition.”

Just half a year later, that ambition had gone up in smoke. On 30 April, lessors abruptly repossessed Bonza’s entire fleet of six 737 MAX 8 aircraft, leaving passengers stranded, crew out of work, and the company in voluntary administration. It took another couple of months for administrator Hall Chadwick to finally throw in the towel, admitting there was no rescue coming for the carrier that had promised to be “here for Allstralia”, and liquidating what remained of its assets.

“It’s still the first thing I think about every single morning, and it’s the last thing I think about at night, being that close and knowing that we were delivering something where there was a need for so many,” Jordan told the Australian Aviation Podcast this year in his first exclusive interview since Bonza’s collapse. “It’s just a shocking and difficult environment for absolutely everybody, and, you know, you’re not feeling great about life.”

It was a dramatic fall from grace for a project that had begun with such lofty dreams – so, what happened? Where did Bonza go so wrong?

Filling in the missing link

According to Jordan, the genesis of Bonza was in the 2000s, upon his return to Australia from a stint in Southeast Asia, when he noticed that the region’s aviation market had something Australia sorely lacked.

“I’d had a wonderful three and a bit years up in the Philippines, with Cebu Pacific. We had gone on a magnificent journey, taking Cebu back to its low-cost roots, and we had grown customers from about 2 million to 7 million over a little more than three years,” says Jordan.

“I’d agreed with my wonderful, long-suffering wife that we’d spend about three years in the Philippines, and my time was up. So, we came back to Australia and moved into our place just south of Coffs Harbour. And these aeroplanes used to fly overhead, mainly red tails, and it became very obvious that the people in my street, the people in the town, couldn’t afford to get on that plane – or, in fact, any other aircraft – and what we’d made happen in the Philippines with Cebu wasn’t actually happening here in Australia, this first-world economy with a far more robust GDP than the Philippines. Something was missing, and that something was Bonza.”

Initially, Bonza was not even called Bonza – the name Jordan had planned was “Coo-ee”, but he abandoned it after seeing how many other tourism companies were using the word. Very different, too, was its fleet plan: rather than the 737 MAX 8s it ended up with, the plan was to run it as a turboprop operation.

“The initial thought was, start small, move to larger. So, the intention was 70-seat props – and I know that’s been commented on by a number of people, and it did start with 70-seat props,” says Jordan.

“That was back in 2008 or 2009, I think, and we didn’t get very far at the time. Ended up putting it on the shelf for a while. Came back to it more seriously after I’d been travelling around and doing various other ventures around the world, had a very serious run at it again in 2016–17; again, 70-seat prop was the focus. It’s not because we didn’t think there were bigger jet-capable airports and market – you required less money to start it with 70-seat props than what you do with a mid-sized, 150- to 180-seat jet.

“I then had an opportunity to go out to Kazakhstan and actually start up the first low-cost carrier as part of the Air Astana Group, the first low-cost carrier in Central Asia, spent a couple of wonderful years up there doing that, and then COVID did its thing and came back, ended up in quarantine on the Goldie, and decided now was the time to pick the plans off the shelf and actually do this.

“Virgin had just gone into administration. They were shrinking. They had retired their ATR fleet, backed away from a lot of the regional stuff, and the opportunity was just getting bigger. So that was the time. And so, whilst in quarantine, I spent 14-16 hours a day locked away with my laptop, revamping the plan again. And actually, I believe it was at that time that there was a jet component and a prop component, because there were more opportunities from a jet perspective.”

It was in late 2020, having been unsuccessful in shopping the idea of Bonza around to Australian investors for around 12 years, that Jordan was introduced to 777 Partners – an investment firm based in Miami and founded by Joshua Wander and Steve Pasko. 777 Partners was already running Canadian low-cost carrier Flair, and importantly for Jordan, they had the funding, the aircraft, and the interest to finally make Bonza a reality.

“They had stuck by Flair Airlines through COVID, or they were sticking with Flair through that process,” says Jordan. “I think they’d gone into ownership of Flair. I’m not sure the specific date, but they had stuck by them for two or three years through everything. They were also buying aircraft, and buying all sorts of businesses, sporting franchises and everything else. We then started the due diligence process, which actually then concluded in September 2021, and we announced ourselves to the world in October 2021. Of course, at that point, 777 Partners had an order book, which was the MAXes – the mid-size jet component of the business plan, not the 70-seat prop component. So, we were launching with the jet rather than with the turboprops.”

According to Jordan, while 777 Partners were “mavericks”, there were no red flags to suggest the trouble that the investment would bring down the road – everything seemed above board.

“I’d still say [maverick] is an appropriate word. There are a number of other words that would be used, I’m sure as well, but ‘maverick’ is how I would describe them,” he says. “They were growing, they were investing, they were purchasing, they were placing new orders for aircraft. And as I say, the biggest and most telling thing was they had stuck with Flair through COVID, and had kept investing in Flair through that whole process. So, they were maverick to deal with, but there wasn’t anything there, apart from that maverick nature, that was ‘run away’ or anything like that.

“The other thing is, what we were looking for was to do something a little bit different as well. And you know, when you’re talking about a maverick investor with someone who wants to do something a little bit left field, that’s probably quite a good meeting place. We went through due diligence with them.

They were asking lots of very good questions, the right questions. And that process took approximately nine to 12 months before we got to the announcement in October 2021 – but they also went through a Foreign Investment Review Board process here in Australia with the government, because obviously, they were basically nearly a 100 per cent shareholder. They weren’t 100 per cent, but it was pretty close to it in terms of the entity. So, they had to go through a Foreign Investment Review Board process, and that all went through in that time frame.”

Making a market

While Australia’s major airlines (and Rex’s 737 operations, before itsown collapse) focus on trunk routes between the big cities – particularly the lucrative but crowded Sydney–Melbourne–Brisbane “Golden Triangle” – Bonza tried a new tack. Rather than muscling in on markets already dominated by the big boys, the purple-tailed upstart based itself on the Sunshine Coast and worked instead to stimulate new demand on “point-to-point” services between regional and holiday destinations.

“From first flight to last flight on the 36 routes that we were flying when we went into administration, the average load factor was 70 per cent – [average of] 130 customers on board each and every aircraft,” says Jordan. “Now, clearly at the start of service, we were at the lower end of that – if you’re averaging 130, you know, maybe it was down around 120 – and it was growing. This industry isn’t all about looking in the rear-view mirror and understanding where you’ve been. You also have the analytics in front of you to actually tell you where you’re going in terms of forward bookings. And we could see that looking ahead, forward booking curves, average fares, everything about Bonza was on the up.

“Did we end up flying some markets which were really just attempting to stimulate more than probably we thought was possible? Yeah, there were a few markets there at the end of the day. But the aircraft time was essentially free, because the aircraft lease was the aircraft lease. So, it was a case of, can we cover the operating costs by doing these sectors. Sunshine Coast to Port Macquarie is a one-hour sector, and that’s the thing to remember, is most of these sectors were really very short. They’re 45 minutes to one hour.

“So, if you like, we were testing some of the markets to see if these markets would stimulate. In the back of our minds, we thought it would be a stretch, and so it proved. Some of these markets actually were in other plans with 70-seat equipment, but we went, ‘We don’t have 70 seat equipment. Let’s see if we can stretch this with some more attractive fares. See how big these markets can get.’ And we learned quite quickly that some of these markets wouldn’t stretch.”

A common criticism levelled at Bonza, both during and after its administration, was that the 737 MAX 8 – of which it had six when it entered administration – was too large of an aircraft to service the regional routes it was flying, with turboprops or smaller regional jets like Embraer E190s being suggested as an alternative. According to Jordan, however, this was not necessarily so.

“Was this equipment too big on certain markets? Yes, on certain markets, absolutely that’s the case; on most markets, absolutely not,” he says. “I’ve heard commentary that it should be 100 seats, should be 100 seats, 100 seats, 100 seats. The Embraer 190 burns the same fuel as a MAX 186-seat jet per hour. So, you can either fly 186 seats, or you can fly 100 seats. We had, on average, 130 seats on each and every route. Now, clearly some markets were lower, some markets higher; on average 130 seats, and growing quite rapidly, and that’s when we had quite a challenging environment for our reservation system as well, at times. So should we have flown a smaller aircraft? Certain routes, yes; most routes, no, the aircraft worked.”

In fact, Jordan adds, Bonza did have plans to potentially add smaller aircraft such as turboprops to its operations down the line, to serve those markets that were indeed uneconomical for large, brand-new, 737-sized jets.

“Nobody wants to really sit on a prop for a thousand kilometres. It’s not that much fun. So, it depends on the route length. There is a whole swathe of markets out there which are potential 70-seat markets,” he says. “Most of the 70-seat markets we didn’t get to. There was a part B to Bonza, and that was a 70-seat proposition. There’s a 70-seat component, and then there’s a 150-plus-seat component, and as is always the case, it’s about the economics of the specific aircraft.

One of the things that we ended up compromising on was that we never expected new aircraft. We ended up with new aircraft. That’s a little bit of a double-edged sword, because it’s wonderful from a product perspective, but it’s negative in the fact that, you know, it means that even on a Tuesday, you’re flying that aircraft, because you’re paying a fairly significant lease rate for that aircraft, so you’re flying it on a Tuesday. Whether it makes great sense to fly on a Tuesday or not, you’re flying it.”

Regardless of the aircraft’s size, the push into new markets was the key element of Bonza’s business model. By the end, according to Jordan, 83 per cent of its routes were not served by any other airline, and he is adamant that the carrier was on to a winning formula, pointing to the success of its Albury operations as just one example.

“Bonza proved that the market is there. More than $100 million in revenue in the first four quarters proves that the revenue is there. The demand is there. We didn’t get this revenue out of Qantas’ pocket or Virgin’s pocket. This was new revenue which was stimulated,” he says.

“We flew 65,000 customers into and out of Albury in just over a year, more than 420 services from the Gold Coast and the Sunshine Coast. Load factor on that Albury market, 84 per cent from first flight to last flight. We grew from two flights a week to six when we went into administration – three to the Sunshine Coast, three to the Gold Coast. The load factor was 84 per cent. Please don’t tell me there’s not a market. There is a market. We’ve proven there’s a market.

“When you actually look at the stimulation rates that we saw and have seen in the market, there’s a very good study out there, it’s a 2017 study by SEO Economics. They look to market growth from 5,000 new routes, primarily in Europe, but also in other jurisdictions. The amount of stimulation we saw in Bonza’s new markets is exactly in line with what the rest of the world has seen in brand-new markets.

“This rubbish that says people in regional Australia do not want to travel, love the car, love to drive – no, people love to explore. Love to get in, love to get out, love to do it as much as the rest of Australia and the rest of the world. We have proven that without doubt. There is no debate. Now, if there is a market in these markets, we have proven it without doubt. Five years ago, it was hypothetical. I was walking around, going, ‘I think there’s a market’. It’s not hypothetical anymore. It’s a fact, and people can go out and look at the data.”

Despite some well-publicised missteps and teething problems – most notoriously the debacle around the rollout of its third base on the Gold Coast in December 2023 which saw massive cancellations due to delayed approvals for wet-leased aircraft brought over from Flair in Canada, as well as issues with its app-based booking system – it was through this business model that Jordan could see, as 2024 dawned, an “inflection point” for the airline that would see it become cash positive by the end of that year.

“Every business [loses money] when you open the door, and aviation is even worse than most when you’re fitting out your business,” says Jordan. “For us, that’s an AOC – that process costs many, many millions of dollars. And then you do that crazy thing, which is to open the door and start operating. So, guess what? You lose even more money because now you’ve you’re actually operating. So, you probably spend $10 million to $15 million getting an AOC. You then start doing that crazy thing called flying, and you lose a lot more money. The hole is getting bigger.

“You then reach a point of inflection in any business, whoever’s running a business, you reach a point of inflection whereby you get repeat customers. Your name is known in the market. You’ve changed things because something’s not working, or something is working, and you add more of it. All of those things mean you reach a point of inflection, and you start to see the numbers get better. You stop going down that hill. The hole isn’t getting bigger, it’s getting smaller. That point of inflection for Bonza was in February 2024, and we could see through forward bookings, our average fares were 10 to 20 per cent higher year over year. Our forward bookings were 10 to 15 points above where they were in the prior year. All of that was saying to us, we have upward trajectory.”

Not only was Bonza poised to break even, Jordan confirms that – as had been mentioned to Australian Aviation by its MRO provider in the weeks after its collapse – the airline had, towards the end of its life, been in talks with a significant Australian investor.

“They had seen enough in the forward numbers that they said ‘we want in’, and they were going back and forth with 777 Partners, there was a term sheet which had gone between the parties. And so, you know, I was incredibly optimistic that we were finally potentially going to have Australian ownership, which I’d been looking for since 2008 – this should always be, ideally, Australian owned. And we got very, very close to that. And as I say, there was a term sheet exchanged, and there was back and forth between the parties, and that was ongoing.

“And then our aircraft were repossessed. So yeah, that was a very bad day for a lot of people.”

Death blow

It was on the morning of 30 April 2024 that Jordan woke to a phone call from Bonza’s chief operating officer Michael Young: the entire fleet had been seized overnight on behalf of lessors AIP Capital.

“The day just goes in a bad way from that point onwards,” Jordan says. “We convened a board meeting, and said that we needed to go into voluntary administration, and at that point, I am obligated to then step back – my role as a CEO is done. So, the administrator then takes on all communication and the administration process to then try and find and identify somebody to take the business forward. They do that because that’s what their expertise is. The trouble is, with our circumstance, we were 15 months into operation, a couple of years old. We had no assets, which is not that unusual for a brand-new start-up airline. You don’t have assets.

“Virgin, when they went into administration, they were 20 years old. They’d gone through cycles of profitability and acquiring stuff, and they have assets. They’re also the number two significant operator in the country. They have assets, so the proposition of getting them out of administration positively is a lot easier. Rex, they had assets, different parts of the business, been around 20 years. They still had half a billion dollars of debt in various shapes and forms. Virgin had their $7 billion in debt.

“We were about two years old, been operating 15 months. We had no assets. We had no aircraft. The potential investor said, ‘What can I do without aircraft?’ The market was hot for mid-sized aircraft – one of the things that probably counted against us was that the MAX pricing in the leasing market had probably increased 15 per cent or more than since we had contracted those aircraft, so those aircraft could be reallocated very easily, very rapidly. Without aircraft, there’s nothing. So, yeah, probably the word I would use was numb. I was numb, personally.”

As it turned out, 777 Partners, the “maverick” investors who had bankrolled Bonza from the beginning and had been responsible for paying the leases on those repossessed aircraft, had suddenly pulled that funding – funding which was noted to already have been “sporadic” and “insufficient” in creditors’ reports after the fact.

“If you actually look through the creditors’ report, you will see we received money very regularly, but the amounts were very irregular,” says Jordan. “So, the consistent thing was the inconsistency of the support that we received – but there was nothing suggesting that the support wouldn’t be there. And in fact, as I say, we were on the brink. Every logical part of you suggests that concluding the arrangement with this very significant Australian investor, that should have happened. That should have happened if what was happening in 777’s world was logical, and I don’t know what was happening, but it doesn’t appear to me to be logical. But yeah, what happened on the events of the 30th – yes, operating a new start-up airline is not exactly a smooth sailing boat on a beautiful day; it’s hard every single day, and there’s things coming at you. It’s a rocky day, every day. But the events of the 30th were absolutely a surprise.”

After the fall of Bonza, 777 Partners ended up caught in extensive lawsuits and criminal investigations, with the firm accused of such financial skulduggery as double-pledging assets to secure loans, pledging assets it did not in fact have, lying to investors, and doctoring financial records. Its founders were last year charged by the FBI over an alleged US$500 million “house of cards”, and in the reports by administrator Hall Chadwick, both the administrators and Bonza’s Australian directors including Jordan accused the firm of effectively signing Bonza’s death warrant through undercapitalisation.

“I tend to refer people to Google ‘777’ and ‘FBI’,” he says. “There is a very detailed press release out there from October 2025, which gives you more backstory in terms of what’s been accused of a number of people within 777 Partners, but we were one of the first, if you like, dominoes, to fall. And it was shocking for customers, for creditors, the Bonza team, everybody involved, because, as I say, we had so much forward positive momentum, and there was genuine belief that we thought we could get to break open this duopoly, but we also thought we were going to be able to do it with an Australian partial owner, at least.

“All logic suggests that that should have been concluded. I don’t know why it wasn’t concluded. I just don’t know if everything else that was swirling around in 777’s world, you know, we were just one of the dominoes. We were just caught up in it. And it was a shocking shame for everybody involved at the time.

“It’s a strange thing, because part of me despises everything about what they did, but there’s a part of me that goes, ‘They stepped forward, and they said, yeah, let’s give it a go’. So, there’s just a tiny bit of me that goes, ‘At least they were there at the beginning, and as maverick as they were, they tried, and I’m grateful for that part’.

“Where we ended up was just shocking, and I hate that with every part of me, but, there’s a part of me that says we’re now more knowledgeable. Because, as I say, five years ago, I was talking about hypothetical demand – I’m no longer talking about hypothetical demand. We have proven it beyond doubt. Demand is there. This country wants to fly more than what it’s doing at the moment, and we are held back by the current environment that we have whereby two airline groups control nearly 99 per cent of the market, and that hurts all of us.”

Picking up the pieces

While Bonza has now joined the likes of Ansett, Compass, and Jetgo in Australia’s ever-growing airline graveyard, Jordan is adamant that there is still room for more carriers in our market to break open the Qantas-Virgin duopoly – and with potential contenders like Koala Airlines on the horizon, Jordan says that if he had the Bonza project to do over again with everything he knows now, he’d make a few changes.

The much-maligned app-based booking system, for example, would go – Bonza had actually ditched the system (provided by 777 Partners) about nine months in and set up a proper booking website, but by that point it had already shaved a significant chunk off the airline’s margin. Jordan says he would also have stuck with the original plan of cheaper, potentially smaller, used aircraft before scaling up; avoided being Australia’s first operator of a new aircraft type; and maybe added a little bit to the ticket price.

“I guess the most significant thing would be, you know, the investor needs to be the right investor. We thought we were onto the right one. We weren’t,” he says. I would dearly love that investor to be Australian. This should have been an Australian business, because we were serving Australian customers. We couldn’t. I searched for 12 or 13 years before coming across 777 Partners.

I think in terms of the blank page: used aircraft, small, then big. The website, in addition to the app; not new type of aircraft; and making sure we don’t actually do anything for Australian aviation, which is the ‘first of’. We had a good relationship with the regulator, but it still means, if you’re doing something for the first time, as we did with bringing the aircraft in from Canada, you can be sure of your own project planning, but you could never be 100 per cent sure of those timelines, and that’s hard. So, avoiding some of those hard steps and paths that we went down.”

But Bonza’s successes, not just its failures, are something to learn from – and Jordan believes that the regional market stimulation strategy, as also shown by Jetstar picking up some of its old routes after the collapse, could be a very valuable asset indeed for Koala or any other new challenger.

“Don’t look at the market data as is,” he says. “If you’re really going to have the best chance, don’t forget some of these regional centres, because the market’s there. The market is absolutely there. And we wanted to avoid doing, if you like, the typical approach of a low cost carrier, which is what Tiger went into the market with – you start with the 10 largest markets, and you keep swinging, and you get your piece of those top 10 markets. Now, knowing full well exactly what the incumbents will actually do, they’ll add capacity around you, discount around you, and make life very hard. OK, great for the consumer. You know you’re going to get that. You probably need to do some of that, but you also need to do something that lets you offer brand-new services in unserved markets. That’s what we did.

“Maybe the answer is a bit of that and a bit of that. And don’t ignore regional centres, because places like Albury, places like Mildura, places like Port Macquarie, Bundaberg, Mackay, and Rocky – they deserve service, and they have proven, beyond doubt, that the markets exist. And just because the duopoly doesn’t go there doesn’t mean the market’s not there. It absolutely is. That is the opportunity.”