BONZA AIRLINES: Terminal

It looks like the sale process for Bonza Airlines run by administrator Hall Chadwick is a ‘no-sale’. 323 staff have been terminated after a six-week process to try to sell the airline and preserve the jobs.

Last week, it looked like the process was pretty much dead in the air, as the final Bonza leased aircraft left Australia. Today, at the virtual town hall meeting held today (Tuesday, June 11, 2024), it was officially confirmed. The administrator also confirmed that all future flights were cancelled, which means all outstanding purchased airfares are now worthless.

What happens now to Bonza Airlines?

The administrator will look at trying to recoup around AU$ 25 million from Bonza’s Liability insurance for its officers and directors.

At the first meeting of creditors, it was reported that the airline owed $77 million for two loans. AU $16 million to trade creditors and $10 million to landlords. AU $5 million was owed in staff wages and entitlements. A further $3 million to government authorities like the Australian Taxation Office.

The company has still not gone into liquidation. That will likely happen on 29 July, the date the Federal Court has approved as the deadline for a sale.

Bonza’s remaining asset is its air operator’s licence, which can’t be transferred. It will be forfeited if the company enters liquidation.

Financial of Bponza Miami-based 777 Partners says it has been too busy preserving its own finances to discuss unpaid wages of Bonza Airlines workers. However, they did have time to object to the payment of AU$ 2.4 million to the companies administrators.

2PAXfly Takeout

The failure of Bonza is very disappointing. It may well have eventually failed because of a flawed business model. But to fail because of underfinancing by its backers, combined with what, to an outsider, looks like some controversial behaviour, is a different matter.

According to the AFR, an asset manager at Leadenhall Capital has alleged that 777 was “operating a giant shell game at best and an outright Ponzi scheme at worst.” Ahhh, capitalism!