BONZA: Flights cancelled. Operations suspended. Planes repossessed

Multiple scources are reporting that Bonza Airlines has suspended operations and cancelled flights today, Tuesday 30 April, 2024. Also confirmed is the reposession of its aircraft registered to Bonza, but owned by “the former investment partner of the discount airline’s private equity owner“, Miami based 777 Partners.

An AFR report by Ayesha de Kretser, says multiple flights out of Melbourne and the Gold Coast have been cancelled.

BONZA Statement

Bonza CEO Tim Jordan has released a statement around 8 am this morning that all flights were “temporarily suspended”while discussions regarding the ongoing viability of the business were taking place.

The ABC is also reporting that a staff members were called to an early morning meeting this morning and were basically tod that Bonza was finished.

“Bonza has temporarily suspended services due to be operated today (Tuesday, April 30) as discussions are under way regarding the ongoing viability of the business.

“We apologise to customers who are impacted by this, and we’re working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market.”

Tim Jordan, Bonza CEO

An unnamed source is reporting that creditors have repossessed Bonza’s fleet of Boeing 737-MAX-8 aircraft.

Discount airline Bonza that flies largely regionally establishing new routes in underserved areas has cancelled multiple flights this morning across the country.

Passenger Chaos

Passengers are reporting receiving multiple messages about cancelled and re-arranged flights. In some examples, conflicting details have been delivered over different channels – email and text – advising conflicting arrangements.

Recently

Over the last few weeks, there have been reports that the ownership of the aircraft has been transferred to a newly created corporate vehicle and away from the financial backer of Bonza, 777 Partners. This also followed reports and denials that finance and bankruptcy specialist KordaMenth had been appointed to provide advice about Bonza.

The Bonza model

Bonza is the first low-cost budget carrier in Australia since the now-defunct Tigerair that started operations 15 years ago, was folded into Virgin Australia, and then folded with them during the pandemic. Bonza positioned itself as a leisure carrier focussing on tourist destinations across regional Australia. It deliberately chose not to,compete with Qantas, Virgin Australia and REX on major inter-capital city routes.

In Asia and Europe this kind of model has worked well, but in smaller markets like Australia and regional Canada, where the owners of Bonza 777 Partners also have another airline, Flair, the model has not been so successful. It looks like the model has failed in these markets with Bonza apparently gone, and Flair also in trouble.

2PAXfly Takeout

Today is another sad day in the history of Australian Aviation, with what looks like another innovative carrier failing. I hope they can regroup, and get off the ground again. But with this current crisis, many Australians will decide to spend a little more for the security of one of the larger carriers.

We will update this story with any further developments through the day.

My only regret, that I never got to fly with them.

PREVIOUSLY REPORTED:

I’ve been wondering about Bonza Airlines for a while. Their email marketing campaigns seem to constantly offer AU$39 airfares or 30% off the cost of flights. These are bargains for customers, but does this look like an airline for the long haul?

Many articles recently report that something is not quite right at the airline and its parent. Advisors have been called in, and conservative National Party politician Briget McKenzie is calling for the government to step in and save the airline.

Bonza cuts back on routes, frequencies and aircraft

From the beginning of May, Bonza is cutting the frequency of flights between Melbourne and the Gold Coast, down to one a week. Conversely, flights between its base on the Sunshine Coast and Melbourne will increase to 5 per week.

Flights on the Gold Coast to Launceston, Tasmania, once three times per week, will fall back to once a week. The Gold Coast/Mount Isa route will be scrapped for May and June. That is on top of five other routes being cancelled in the first six months of the airline’s operation.

Aircraft delivery to Bonza was initially plagued by diversions to other airlines owned by its parent company, 777 Partners, such as Flair in Canada. Now, Bonza has its newest plane, Bruce, standing idle awaiting ‘re-certification’ by the Civil Aviation Authority.

Call in the advisors for buget leisure airline

Financiers who support both 777 Partners and Bonza called KordaMentha, usually known for their work with companies in voluntary administration, like Ansett Airlines, immediately after the September 2011 attacks in the USA.

In this case, KordaMentha has been asked to assess the airline’s operations. Bonza’s fleet has been re-birthed to a new company, Phoeniz Aviation Capital, wholly owned by A-Cap. They now hold all of 777 Partners aircraft, some 30 Boeing 737-MAX 8s. But the operator of Pheonix is AIP Capital. If you want to delve further into the ownership structure and financing, see this AFR article. CEO Tim Jordan has denied that Bonza has any relationship with KordaMentha. That may be so, since one of the other entities named above might be the commissioner of the advice.

Bonza and 777 Partners challengers

Managing Director of Bonza, Tim Jordan, says that ten aircraft are needed to make the budget airline profitable in its chosen strategy of servicing new routes, mainly in the leisure travel market. The challenge is to amass those ten aircraft in a very tight leasing market.

Bonza financier 777 Partners is facing its own challenges, including Irish aircraft lessors suing over unpaid leasing fees. Think that’s bad? The Justice Department in the USA is also interested in 777 Partners concerning some money-laundering allegations.

2PAXfly Takeout

The Australian airline industry is littered with failed airline startups (Tiger, Advance, Air Australia, Compass – to name a few), let alone major players like Ansett. It’s not easy to launch something new with a very dominant player (Qantas) along with its duopoly partner, Virgin Australia.

Bonza has a bold plan, trying to create a new secondary market for the price-conscious leisure traveller. Many feel that the model is flawed. I tend towards that view myself. However, hats off to anyone attempting a new airline in the Australian market, especially trying to service a new market.

I hope that Bonza survives. Unfortunately, the auguries are not optimistic.