Australia’s newest low-cost airline Bonza, on Tuesday (Apr 30) suspended all flights and entered voluntary administration, regulatory filings showed amid concerns about the viability of its business and has potentially left thousands of passengers stranded.
About the collapse of the airline
The collapse of the Australian airline came around 15 months after Bonza launched its services with the backing of 777 Partners, a United States-based investment firm.
In a statement, the budget carrier said that it suspended all services for the day amid discussions about the “ongoing viability of the business”. It also apologised to the customers who have been impacted by the decision.
“We apologise to our 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,” said CEO Tim Jordan.
Bonza launched its services last year and has been the first to enter the market in Australia since 2007.
Notably, the market in Canberra is dominated by Qantas and Virgin Australia, which together control about 90 per cent of Australia’s airline market, reported Reuters.
The budget airlines, before it suspended its operations, connected small regional airports across Australia to main cities like Melbourne and Gold Coast.
Bonza had sought to shake up the country’s competitive aviation sector with cut-price tickets. However, the airline has previously garnered criticism due to flight cancellations and the suspension of some routes.
Additionally, speculation was also rife about the Bonza’s future after its reported inability to secure access to take-off and landing spots in Sydney, which is said to be a lucrative market.
Cancellations and control of flights
The announcement prompted the Australian government to set up a hotline for passengers who have been affected.
Meanwhile, the country’s Transport Minister Catherine King said that she has also spoken to other airlines about helping those stranded and both Qantas and Virgin have agreed to offer assistance.
King also said the government’s priority is to ensure stranded Australians reach home safely and quickly.
A report by Reuters citing an anonymous source said AIP Capital had begun to take control of Bonza’s four Boeing 737-Max-8 aircraft just after midnight on Tuesday.
When asked if the government would bail out Bonza, King told state broadcaster ABC that the government’s role is to “ensure that we have a strong aviation sector within Australia” but bailing the airlines out “is not something that the government has before us.”
(With inputs from agencies)