The Federal Court of Australia has granted a two-month extension to the administration period for Bonza Airlines, which collapsed on May 28th, 2024. This decision provides a potential reprieve for creditors facing financial losses and the airline’s 300 stood-down employees.
Justice Ian Jackman acknowledged the strain on Bonza’s workforce but deemed the extended administration period ‘necessary’ under the current circumstances. The additional time allows the appointed administrators, Hall Chadwick, to thoroughly evaluate purchase proposals and determine the most suitable course of action.
Bonza’s legal representative, James Hutton, argued for the extension in court, emphasizing the potential for a significantly improved outcome for all creditors, including employees. This underscores the critical need to secure a buyer and prevent Bonza from entering full liquidation.
The collapse of Bonza highlights the inherent difficulties faced by new entrants in the Australian low-cost carrier market. Factors such as the vast distances within Australia, a relatively low population density, and the dominant presence of established airlines like Qantas create a challenging environment for new businesses.
While Bonza’s limited footprint may not significantly affect competition on major routes, its demise represents the loss of a potential lifeline for regional travel options. This latest instance adds to a string of failed Australian low-cost carriers, further emphasizing the substantial challenges they face in the competitive domestic aviation sector.
