Bonza’s Lifeline: Administrators Granted Extension to Find Buyer

Administrators have been granted a crucial extension to secure a buyer in a pivotal moment for the future of Bonza, the grounded Australian low-cost carrier. The airline, which faced an abrupt halt in operations last April, has been under the management of Hall Chadwick, who now has until the end of July 2024 to navigate the airline to safer skies.

The decision came after a compelling case presented in the Australian Federal Court on May 27, 2024, where Hall Chadwick highlighted the plight of approximately 300 employees left in limbo since the airline’s fleet was grounded. These individuals, still tethered to Bonza without formal dismissal or pay, are caught in financial and professional uncertainty, unable to access state benefits or seek new employment.

James Hutton, representing Hall Chadwick, emphasized to Justice Ian Jackman the significant value of Bonza’s Air Operator’s Certificate (AOC), a critical asset that risks cancellation should the airline face liquidation. The preservation of the AOC is seen as a beacon of hope for both the creditors and the employees, potentially leading to a more favourable financial recovery than the Fair Entitlements Guarantee could offer and even the prospect of continued employment with Bonza.

Justice Jackman, resonating with the arguments laid forth, ruled in favour of extending the administration period by two months, a move deemed in the best interest of the company’s creditors. This extension is not just a lifeline but a strategic opportunity for the administrators to enhance the outcomes for all parties involved, particularly in light of the ongoing sale process, which promises a better return than immediate liquidation. This decision brings a glimmer of hope for the future of Bonza, its employees, and its creditors, potentially leading to a more favourable financial recovery than the Fair Entitlements Guarantee could offer and even the prospect of continued employment with Bonza.

The future of Bonza, however, hangs in the balance. Since the repossession of its aircraft and the subsequent voluntary administration, the airline’s fate has been a subject of intense speculation and concern, especially with the withdrawal of interest from Vietjet, a previously keen suitor. As the search for a new owner continues, the question remains: Will Bonza soar once again, or is this the final descent for the budget airline? The coming months will be critical as Hall Chadwick steers through these turbulent times, seeking a safe landing for Bonza and its employees.

Early in May 2024, during an initial creditor meeting in Sydney, Hall Chadwick gave some details on how much debt Bonza had accrued since the company began operations in 2023. The total rounded out at over AUD 116 million ($77.2m), including AUD 4.6m ($3.1m) owed to aircraft lessors, AUD 76m ($50.6) owed to two undisclosed creditors, 10 million owed to ten landlords, 15 million owed trade creditors, and 5 million owed to 324 workers.

While the administrators look for the funding needed to resurrect the grounded carrier, a variety of supporters and business stakeholders have begun an internet campaign called “Bring Bonza Back” to try to raise awareness of the carrier.