Australian ultra low cost carrier Bonza has “temporarily” suspended flights, a little over a year after launching operations.
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Bonza suspends operations “temporarily”
Bonza has announced that it has suspended operations effective immediately:
Bonza has temporarily suspended services due to be operated today (Tuesday 30th April), as discussions are currently underway regarding the ongoing viability of the business. 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.
For context, Bonza started flying in late January 2023, using a fleet of four Boeing 737 MAX 8s, featuring 186 seats each. Australia can be a challenging airline market, given that it’s a large country with a small population, and that population is also centered around a limited number of airports.
To Bonza’s credit, the airline actually operated a unique set of routes. Of Bonza’s 36 routes, only six were also operated by Qantas or Virgin Australia. Then again, there was probably a reason that Australia’s other carriers chose not to compete in those markets.
In recent weeks, there had been rumors of Bonza being in financial trouble, with rumors of the airline entering administration and/or having its aircraft seized. Despite denials, that has in fact happened now.
Personally I wouldn’t count on the airline entering administration and making a comeback. There’s not a whole lot to save here, as the carrier’s four planes have been repossessed, the airline wasn’t making money, and it’s not clear if there actually is a viable business model here. It’s a bit different than when Virgin Australia entered administration during the pandemic, and radically transformed its business.
Bonza is owned by 777 Partners
A Miami-based investment firm named 777 Partners owns Australia’s Bonza and Canada’s Flair, both of which are ultra low cost carriers. Last year there was a fascinating story about 777 Partners’ alleged business practices, and the investment firm’s troubling method for profiting off of the airlines it owns.
Flair had seen some 737 MAXs repossessed due to lack of payments, and now the same has happened at Bonza. According to a lawsuit that had been filed against 777 Partners, the investment firm was essentially setting these airlines up to fail, pocketing $10 million on each 737 lease, and charging 18% interest on loans.
Now, I can’t personally vouch for what’s alleged in the lawsuit, though based on that information, I’m not surprised to see that both Bonza and Flair have struggled to stay in business and operate reliably.
Bottom line
Australian ultra low cost carrier Bonza has suspended operations, after the carrier’s planes have been repossessed. For now, this is being described as a temporary suspension, as the airline intends to enter administration. However, given the lack of assets or a viable business plan, plus the suspicious parent company, I wouldn’t count on this being all that temporary…
What do you make of Bonza suspending operations?
An airlline that lasted 15 months in operation. They must not have had much money backing them up. Seems a poor business plan for a startup
I’d be curious if the planes that were reposesssd were those that were subleased from Flair or ones they’d leased directly.
Flair and Bonza had a strategy of shifting aircraft based on different demand profiles in the northern vs southern hemisphere
Typical ULCC that thinks all there is to running an airline is offering dirt cheap fares then reality takes over.
2 thoughts:
1. Did someone force a gun to their heads to accept the 18% interest rates?
2. How are planes repossessed? Do they just sneak in the airport at night and fly it away?
Ok I did some more research into the first one: I found some people saying online that Bonza is majority owned by 777. That's pretty gross
Depends on the type. In smaller aircraft, it's not much different than with cars/boats/etc. Companies like Sage Popovich specialize in such.
In larger/commercial aircraft, it's usually a matter of injunctive action. Lessors and lenders write the terms into the contract, and they're generally straightforward:
"If you owe us $XX beyond YY amount of time, then we the lender will seek immediate injunctive relief, and the last place the...
Depends on the type. In smaller aircraft, it's not much different than with cars/boats/etc. Companies like Sage Popovich specialize in such.
In larger/commercial aircraft, it's usually a matter of injunctive action. Lessors and lenders write the terms into the contract, and they're generally straightforward:
"If you owe us $XX beyond YY amount of time, then we the lender will seek immediate injunctive relief, and the last place the aircraft lands is where it will remain until we decide otherwise."
No. Again, it differs by the type of aircraft:
Smaller ones, may have locks/devices put on them, until an independently designated MRO provider can certify that it's in sufficient condition to be flown elsewhere.
In commercial aircraft, the maintenance log is seized and reviewed, prior to a decision on operation; though most lenders will demand an MRO review as well, just to CYA.
777 Partners and everyone on their Board belong in prison. A criminal outfit.
Four more MAX jets back in the pool. Is that UA or AA that I hear calling??
“Southwest on line 1…”
Flair will probably Flare out too.
That's 18 more MAX jets in the pool.
"Alaska Air on line 2....."