Bonza administrators say ‘no option’ but to sack all staff after failed search for buyer

Bonza appears almost certain to be wound up after the administrators determining the troubled airline’s future terminated all staff and cancelled all future flights following a failed search for a potential buyer to save the carrier.

On Tuesday afternoon, administrators from the firm Hall Chadwick confirmed Guardian Australia’s earlier reporting that they had convened a town hall meeting with staff that morning where they told employees they had been terminated and all future flights had been cancelled.

Employees subsequently voiced their frustrations at how the administration process had been conducted, sources say.

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The budget airline’s 323 employees had been stood down since 30 April, when the airline appointed administrators after its fleet of six Boeing 737 Max-8 aircraft was abruptly repossessed.

It later became clear that Bonza’s local business leaders had been blindsided by a breakdown in the relationship between 777 Partners – the airline’s private equity sole owner – and its financier, the US insurance giant Advantage Capital Holdings, known as A-Cap, which led to a change in the ownership structure of the leased aircraft last month.

Early on in the administration process, the administrators had been confident of finding a buyer for the airline, but those hopes faded in recent weeks.

The abrupt repossession of its entire fleet of aircraft left little value in the business beyond its air operators licence.

Interested buyers had been given until last Friday to put in offers for Bonza.

In its statement on Tuesday, Hall Chadwick said no formal offers for the airline had been submitted by the deadline.

Parties who had previously expressed interest and conducted due diligence on the company ultimately opted against lodging a binding offer.

“The administrators assisted a number of interested parties through the sale campaign, allowing each party to conduct their due diligence and formulate any offer,” the statement said.

“Unfortunately, the administrators did not receive any binding offers.

“As a result, the administrators have no option but to terminate all employees and cancel all future flights.”

The administrators will now convene a major meeting of creditors, where employees, customers and trade suppliers will decide on the future of the company. The date of the major meeting has not yet been set, but is understood to be soon.

Unless a potential buyer emerges at the last minute, creditors will have no option other than to wind up the company.

Staff are still owed wages.

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The Transport Workers’ Union (TWU) said it was ready to help Bonza employees seek unpaid wages through the commonwealth’s fair entitlements guarantee process.

However, it was unclear if this was possible, as the airline technically remains in administration.

“Although the termination frees up Bonza employees to seek alternative full-time employment without losing their owed entitlements, the federal government FEG scheme doesn’t kick in unless or until Bonza goes into liquidation,” the TWU said in a statement.

The union’s national secretary, Michael Kaine, said: “This is incredibly difficult news for Bonza employees, who have received no pay for more than two months after the airline’s sudden collapse.”

Kaine added: “It’s a dark day for regional communities across Australia, which remain isolated through unaffordable or unavailable air travel to remain connected with the nation.”