Embattled regional airline Bonza has gone into administration aftercancelling flights across the country on Tuesday and stranding potentially thousands of passengers.
Documents filed with the Australian Securities and Investments Commission (ASIC) reveal Bonza Aviation Pty Ltd was at 3.25pm declared "externally administered", with accounting and advisory firm Hall Chadwick appointed to the role.
In a media release on Tuesday afternoon, Hall Chadwick confirmed Bonza's fleet would be grounded until Thursday, May 2.
Virgin Australia, Qantas and Jetstar have offeredcomplimentary seats, where available, on their flights to passengers stranded mid-journey on Tuesday.
Bonza chief executive Tim Jordan released a statement on Tuesday morning saying all services would be "temporarily suspended" whilediscussions were held about the ongoing viability of the business.
The airline has not responded to requests for comment, but has published a statement on its websiteand appapologising to affected customers.
"We’re working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market," the statement reads.
Early Bonza flights in and out of its base on Queensland's Sunshine Coast, along with Melbourne legs to Rockhampton, Gladstone and Tamworth, were all cancelled on Tuesday morning.
Three Bonza planes were parked on the tarmac at Sunshine Coast Airport on Tuesday, including a Boeing 737-MAX aircraft named Bruce, which had been leased from Canadian low-cost airline Flair to fly in Australia.
Bonza's financial position has been the subject of intense speculation since its first flight early last year.
"The discussions regarding ongoing trading are occurring over the forthcoming days and the administrators will be in a position to update all stakeholders as the matter progresses," Hall Chadwick said.
Passengers stranded
Rona Wall caught a shuttle bus to the Sunshine Coast airport early on Tuesday morning hoping to catch a flight to Rockhampton, after her scheduled Bonza flight from the Gold Coast was cancelled on Monday.
She said she received multiple correspondences from Bonza about a rescheduled flight, which created a lot of confusion.
"I've got a text message that was in my younger daughter's name, and an email, and also [a message] on the app," Ms Wall said.
"All three notifications were for three different flights."
Nicole Morris was due to fly from Melbourne to Rockhampton on Tuesday with Bonza but was told her flight had been cancelled when she arrived at the airport.
"It's crap, I don't know what I'm meant to do," Ms Morris said.
"I've come in and I can't find anyone to talk to — there's nobody here."
Bonza said affected passengers had been told they would receive a full refund.
The federal Transport Department has set up a hotline for stranded passengers on the number1800 069 244, which will operate until 10pm.
'They were told Bonza has finished'
A Sunshine Coast man whose wife works for the airline told the ABC about 20 cabin crew were called into a meeting early on Tuesday morning.
"There were two crews there —they were just basically told that Bonza has finished," he said.
"They've been told that they're not flying until further notice.
"They've all been told that the bottom line is that Bonza will no longer be flying."
He said the news was a blow for staff and the region.
"They're pretty devastated. It's their job. She's been in it from day one. It's a bit of a blow for Maroochydore and the Sunshine Coast," he said.
History of cancellations
After months of delay, Bonza was given the go-ahead to start flying regional routes from the Sunshine Coast in January last year.
It was the first new local airline since Tiger Airways launched 15 years earlier, and itsbusiness model aimed to link regional centres often ignored by the larger carriers.
The company launched a base in Melbourne two months later.
Since launching,Bonza has faced criticism for cancelling flights, including mass cancellations over Christmas, and suspending routes.
A spokeswoman for Bonza last week, when the company cut services from the Gold Coast,said it was working on improving customer service due to passenger complaints.
'Devastating' for regional tourism
Bundaberg Tourism chief executive Katherine Reid said the news was devastating.
"We believe that the Melbourne to Bundaberg route has been one of the strongest performing in the state for Bonza, sitting at an average of 90 per cent capacity," she said.
Ms Reid said that equated to as many as 400 people a week coming from Victoria into the Wide Bay region.
"We know a lot of people have had holidays booked," she said.
"We need to continue working with all levels of government to really attract airline partners into regional areas."
Call for bailout
Nationals MP Barnaby Joyce said he hoped the airline could "see their way out of" the situation but said the federal government could be doing more to help.
He wanted the government to consider a bailout package.
"Certainly consider it ... on the premise of a better market outcome for all passengers not just helping out one company," he said.
North West Queensland MP Robbie Katter said Bonza's struggles were a symptom of a bigger issue in the industry.
"It's disappointing because we need this competition," the Traegar MP said.
"The bigger guys will always make it as difficult as possible for airlines to enter the market and destroy the dominance they've got.
"I'll plan to push the government to underwrite these funds so that bush residents aren't left worse off."
'Burning money'
Aviation analyst Geoffrey Thomas, the editor-in-chief of the website Airline Ratings, saidhe understood the airline's backers, 777 partners, had made changes to the leasing and financing of its aircraft.
He said the budget carrier may have been caught off guard.
777 Partners has been contacted for comment.
"It's shattering news, particularly for those affected who hold tickets and were going to fly today or tomorrow," Mr Thomas said.
"I think that the problem of Bonza is overseas, with leasing companies, and not the local management, not the business model."
But he said the low profit margin model could be tough in regional Australia, given long distances and relatively low passenger numbers.
"If you need 85 per cent capacity and you only get 70 per cent … then you're burning money," he said.
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