Australian News Today

Huge blow for passengers of bust airline

Huge blow for passengers of bust airline

Passengers of bust airline Bonza won’t be getting a refund “at this time”, according to the airline’s administrator.

The budget carrier went into voluntary administration on Tuesday after abruptly cancelling all flights that morning following the repossession of its entire fleet.

Passengers were left stranded at multiple airports across the country with no notice, as the airline’s owners considered the viability of the business’ future.

Bonza appointed firm Hall Chadwick for the administration process on Tuesday after the airline’s small fleet of Boeing 737 Max 8s was repossessed by leasing company AIP Capital.

In a statement issued on Wednesday, Hall Chadwick delivered a blow to customers regarding refunds for cancelled flights, after examining the finances of the grounded airline.

“Unfortunately, the administrators and/or the company are not in a position to process or issue refunds at this time,” the statement read.

“We understand how frustrating this is and we appreciate customers patience at this time.”

Comparetravelinsurance.com.au director Natalie Ball said travellers may be eligible to claim back their costs through travel insurance.

“Several travel insurers in the market will provide cover for loss of prepaid expenses in the event of an airline entering voluntary administration,” Ms Ball said.

“However, cover will usually only apply to comprehensive, higher-tiered policies and claims will be assessed on a case-by-case basis.”

Ms Ball said not all travel insurers provide insolvency cover and customers would have to already have policies in place to recoup their costs.

“Some providers do offer benefits in case of the financial default of an airline, tour operator or accommodation provider,” she said.

“However, if your provider had already entered administration prior to you purchasing travel insurance, you would not be covered.”

Bonza’s fleet has been grounded at least until the end of Thursday, with the administrators advising passengers with bookings not to turn up to the airport. Administrators remain in talks about the airline’s fate beyond the end of the day.

The administrators have also issued a notice to customers who were scheduled to travel.

It reminded customers with any queries to call hotline 03 8678 1600.

“The administrators have personnel available to discuss the administration, continued operations and assist with queries and this is operational from 7am to 10pm,” administrators said.

Hall Chadwick said they appreciate it’s a “difficult time for all involved”, adding there had been “open dialogue” with the lessor.

There remained hope Bonza’s operations could be salvaged, with the administrator meeting with “key industry participants” within Australia and overseas Tuesday night and Wednesday.

“To this end the administrators have had meetings overnight and this morning with key industry participants located within Australia and overseas,” the statement read.

“These meetings are ongoing and will continue tonight and tomorrow.”

However, according to Transport Minister Catherine King, it appeared unlikely the airline would return to the skies.

“We’ve been speaking to the administrators overnight, they’re trying to get the airline back up and running,” Ms King told ABC radio on Wednesday.

“It’s unlikely that will happen.”

Hall Chadwick has also been in communication with the company’s chief financial officer to go through the financial position of the business.

Meanwhile, Bonza chief executive Tim Jordan remained out of communication after telling employees late Tuesday it had been “a shocking day” and “quite unexpected”.

Speaking to news.com.au, a Queensland-based cabin crew member — who asked to remain anonymous — shared an internal staff message received from Mr Jordan at 3am on Tuesday regarding the airline’s circumstances

Viewed by news.com.au, the memo advised that “all aircraft have had repossession proceedings commenced by AIP the aircraft lessor”.

“This was a surprise to both ourselves and 777 partners,” the memo from Mr Jordan read.

“We are currently assessing all options and will provide an update just as soon as we have more information available to share.

“As a consequence of this all first wave flights from all bases have been cancelled.”

The cabin crew member told news.com.au that “something has been going on” for a while and that the airline had been “tightening the strings” more and more.

The staffer – who was at the time still rostered on to work on Wednesday – said despite the airline going into voluntary administration, nothing had been communicated to staff.

Rival airlines Qantas, Jetstar and Virgin Australia have all said they will support affected Bonza employees.

– with Vanessa Brown