Bonza Airlines, once a beacon of regional connectivity, has officially been wound up. The decision came after a decisive meeting Last Tuesday morning, where creditors voted 35 to six in favour of liquidation.

The Unravelling of Bonza

Despite the best efforts of administrator Hall Chadwick to salvage the airline by finding a buyer or a backer willing to step in with a Deed of Company Arrangement (DOCA), no offers materialised. Hall Chadwick, who will now serve as Bonza’s liquidator, stated, “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.”

A Failed Rescue Attempt

An extensive sales campaign was launched, involving numerous investors, other airlines, and companies from the travel industry. However, the campaign concluded without any offers to sell the company’s business and assets.

The Financial Turbulence

A report released by Hall Chadwick revealed that Bonza, which has been grounded since April, had accumulated a loss of more than $133 million when lessor AIP Capital seized its planes.

Workers’ Plight

The move to liquidate has allowed Bonza’s workers, who were all sacked in June, to claim their unpaid wages under the government’s Fair Entitlements Guarantee (FEG) scheme. 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 instead of notice.

The Aftermath

TWU national secretary Michael Kaine commented on the collapse, stating, “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.”

Kaine also reiterated the TWU’s call for more government intervention in the sector following Bonza’s collapse, highlighting the potential impact on regional areas. He stated, “The worst of this news is the hopelessness of reconnecting regional Australia without intervention from a regulatory body.”

The Blame Game

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

The Investigation Continues

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 investigating 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 End of an Era

This marked the end of Bonza Airlines, a low-cost carrier that provided valuable services to regional Australians. The story serves as a stark reminder of the aviation industry’s volatility and the importance of adequate funding and government intervention. It’s a sobering tale of an airline’s descent, leaving behind a trail of unpaid wages, disappointed passengers, and a gap in regional connectivity.