Buyer Interest Claim Prevails Despite Massive $110 Million Debt
Administrators for troubled budget airline Bonza maintain that there are still numerous interested parties looking to purchase the financially struggling airline, despite it being in debt to the tune of around $110 million (US$72.7 million).
The full extent of the budget airline’s financial troubles was revealed at its initial creditors’ meeting in Sydney on May 10.
Bonza’s outstanding debts include nearly $77 million (US$51 million) from two loans, close to $16 million (US$10.5 million) owed to trade creditors, and an additional $10 million (US$6.6 million) to landlords.
Other debts include over $5 million (US$3.3 million) in staff wages and leave entitlements, as well as $3 million (US$2 million) to government authorities like the Australian Taxation Office.
Aircraft lessors, who initiated a wave of flight cancellations at Bonza by terminating agreements and reclaiming planes, are owed $4.6 million (US$3 million).
Bonza has suspended flights until at least May 8.
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However, administrator Richard Albarran, from Hall Chadwick, indicated that multiple parties have shown interest in acquiring the airline, with a potential sales timeline to be determined over the weekend.
Discussions have taken place with approximately 20 interested parties ranging from airlines to travel industry entities, as disclosed during the meeting.
No further specifics were shared due to commercial confidentiality, but Mr. Albarran affirmed that at least one interested party has aircraft readily available for immediate operation.
Administrators have engaged in talks with state and federal governments regarding a potential support package, although nothing has been finalized.
Administrator Kathleen Vouris mentioned that a comprehensive financial report will be compiled within about five weeks prior to creditors deciding on the administration’s conclusion, a company arrangement deed, or liquidation.
Several creditors raised concerns about potential insolvent trading by Bonza, to which Mr. Albarran responded that the airline had been operating with significant financial challenges, although it was too early to determine any official breaches of director duties or insolvency.
The meeting highlighted that sourcing new aircraft could take roughly three months, but interim leasing options might be available sooner.
Over 57,000 affected customers were advised to contact their financial institutions or travel insurance providers, as Bonza will not be offering refunds.
Another administrator, Cameron Shaw, initiated the meeting by expressing apologies to Bonza’s employees, suppliers, and customers.
Nevertheless, he emphasized the potential for a positive outcome in Australia’s competitive airline market, stressing a hopeful resolution for Bonza’s future.
More than 300 Bonza employees remain on stand down.
