Summary
- Bonza’s downfall leaves over 300 employees without jobs or pay, marking the end of the low-cost startup’s promise.
- Administrators have failed to find a buyer for Bonza, leaving employees in limbo without access to their entitlements.
- The failed airline’s future remains uncertain, but the trust of staff and customers has been irreparably damaged.
When Bonza’s last aircraft left the country last week, it was pretty much game over for the low-cost startup that had promised so much but has now left with its tail between its legs. Today, that end got a little closer as the liquidators axed more than 300 employees and canceled all future flights, ending the limbo that former staff and customers have been in since administrators were appointed on April 30, 2024.
The real legends are all gone
Chartered accountants and business advisors Hall Chadwick are the administrators of Bonza and have kept the dream flickering as they sought to find a buyer for the airline’s carcass. The administrators set a deadline for interested parties to submit a binding offer regarding Bonza’s future, but when that expired last Friday, nothing was on the table.
Photo: via Bonza.
Hall Chadwick said they had assisted several interested parties through the sale campaign by allowing each party to conduct due diligence and formulate an offer. Since the airline was grounded on April 29, almost all Bonza staff have been stood down without pay, with the double whammy of not being paid for April either.
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Today, the administrators had to make a decision, and while they said it is possible a third party might come forward with an alternative solution, the status of the employees needed to be resolved. In a statement today, Hall Chadwick said:
“While this is not news stakeholders wish to hear, the Administrators must make a decision with respect to the stand down of employees. Furthermore, customers need certainty regarding the operation of future flights. As a result, the Administrators have no option but to terminate all employees and cancel all future flights.”
These days, relationships end via a text, and people get fired with an email, and today was just as impersonal for all the hard-working and incredibly devoted crew of Bonza Legends. Around 250 staff members joined a virtual town hall meeting with the administrators to be told they had officially lost their jobs in scenes reminiscent of when Virgin Australia staff got the same message in 2020.
Why drag this on?
The fact that Bonza has not been put into liquidation inflicts even more pain on these now ex-employees. The administrators, who are being handsomely rewarded for their time, seem in no rush and said they are now preparing their final report for creditors and investigating whether the business traded while insolvent.
Photo: Bonza
As long as Bonza remains in voluntary liquidation, the ex-employees cannot access a government program to claim their unpaid wages and redundancy entitlements. The Federal Court has extended the administrator appointment until July 29, and if Bonza is not placed in liquidation before then, the employees will have gone without their entitlements for four months, even though it seems clear there was never going to be a white knight to save the failed airline.
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Today’s official line is that the company’s future is still to be determined, as a third party may still submit a Deed of Company arrangement proposal for creditors’ consideration. Based on previous notices from the administrator, Bonza’s assets don’t amount to much and are nowhere near its debts of around AU$110 million ($73m).
Photo: Bonza
There is some hope that Bonza’s Air Operator Certificate can attract a buyer, but it is not transferrable and would probably be forfeited if Bonza went into liquidation. At one point, Hall Chadwick revealed that former owner Miami-based 777 Partners, which is owed around AU$80 million ($53m), was considering submitting a Deed of Company Arrangement, but nothing more has been heard of that.
The reality is that whatever Bonza is today, it has no planes, no people and has completely lost the trust of the very people it set out to serve, the down-to-earth people living in regional and rural Australia. There seems little reason to continue funding an accountant’s picnic while the staff who tried so valiantly can’t even access a government fund to claw back some of what they are owed. It’s time to call it a day.
What do you think? Let us know in the comments.