RIP Bonza

[nomess]

Always risks with new startups. If you look at past attempts, local and overseas, the state of any startup is vastly different from the start to say a decade later. Many simply don’t make it. Those who are powered by a mothership in the same industry, generally survive, or, merge/close with the parent/other subsidiaries, and crew manage to survive. Tiger was a basket case and only survived simply because of who its parent was. Any other sane investor would have dumped it long ago.

Look. It was an attractive option for crew when it started. Certainly an attractive lifestyle. Many simply hate Virgin and don’t want a bar of it, it’s a toxic mess, operations normal, so this presented an option. Virgin FOs who have been around for a bit, are facing lengthy waits in the RHS, this gave them an option to move over in under a year.

Domestic Narrowbody with QF Mainline, VA, JQ will always be the most secure and stable job. Unfortunately that comes with the politics of ego run flight ops departments, and long waits for an upgrade. Gotta be a trade off I guess.

So what is the answer then? Well simply stay away from startups. Be mindful listening to fluff from Branson wannabes also.

[markis10]

Well, ‘SHAZZA’ has left the country for darkest, deepest SE Asia and that was the last man standing.
Why doesn’t JORDON just grow a pair and fess up to the staff that it’s All Over, Not a chance, Get on with your lives.
Before I’m inundated with “it’s not the responsibility of the Provisional Liquidator”, these smartarse ex-airline middle manager types take on an ego driven CEO gig yet are responsible to No One and don’t give a **** about the stress and pain they inflict upon their staff.
I’m sure there would be a couple of experienced pilots there that were not at all surprised, but at the same time there would be wide eyed cabin crew & ground staff who drank the coolaide & rearranged their lives around their new found jobs.
It just ****s me, after 40yrs of flying airline transports here & OS, we all knew BONZA was doomed, and would leave another wreckage of working lives on a heap, out of pocket too I’m sure.

Not quite the “last man”. Sheila is entombed at OOL (VH-UJK).

Agree with your feelings around middle managers, people’s lives have been put on hold because they believed the lies from day 1 and became sacrificial lambs. Any bids were due Friday so it’s likely to wrap up soon enough.

[antheads]

So what is the answer then? Well simply stay away from startups. Be mindful listening to fluff from Branson wannabes also.

Did you 'run the numbers' on your Commodore 64 and send a Telex that Virgin Atlantic is doomed from the start back then too?

[nomess]

Did you 'run the numbers' on your Commodore 64 and send a Telex that Virgin Atlantic is doomed from the start back then too?

Virgin has never made any money be it UK or Australia. Virgin America was another cash burner.

Branson personally has made money from it. As did Godfrey. Quite a bit also.

Virgin has been lucky in that it got market share very early on, that market share has been key to future buy ins, and the reason why PE firms are involved today to milk the cow.

Tim Jordan had a financial share in the Bonza dream from what was reported, only a few million. Obviously sell off later and take the windfall. Likely a bit too late to that party.

[krismiler]

As I pointed out earlier, back the right horse with a start up and you can expect a quick upgrade and a high seniority number. If you back the wrong one then it's fingers crossed that you got enough time on type to be employable and covered any training costs you incurred.

Ideally you want a company with some serious money or a major airline behind it. However even with Richard Branson's backing, Virgin Blue only avoided going under because Ansett went bust.

Start ups don't have a good record in Australia, Compass 1&2 didn't last long, Impulse would have gone under if QF hadn't acquired it, Flight West were lucky to get taken over and Tiger Australia was a flash in the pan.

MinRes seems to be a good bet with a mining company operating its own aircraft, financially secure and not subject to travel whims or competition. Mines need reliability and safety and are willing to pay for it.

[regional_flyer]

MinRes seems to be a good bet with a mining company operating its own aircraft

*contracting to SkyTraders the operating of aircraft with the MinRes logo on the side.

[TBM-Legend]

*contracting to SkyTraders the operating of aircraft with the MinRes logo on the side.

so what’s this got to do with Bonza?

[markis10]

*contracting to SkyTraders the operating of aircraft with the MinRes logo on the side.

They wet lease Skytraders A319 now, but will have A320s they own soon.
https://careers.mineralresources.com.au/jobs/captains-first-officers-osborne-park-wa-australia-perth-airport

[longlegs]

Microphone drop

On 21 May 2024, the Administrators were informed by 777 Partners, who we understand to be the ultimate holding company of Bonza and 777 Holdco domiciled in the United States, that it may wish to propose a Deed of Company Arrangement (DOCA) to restructure the Companies as a group. The Administrators have not yet received a proposal for a DOCA from 777 Partners.

[regional_flyer]

They wet lease Skytraders A319 now, but will have A320s they own soon.
https://careers.mineralresources.com.au/jobs/captains-first-officers-osborne-park-wa-australia-perth-airport

For the cabin crew at least, all applicants for the MinRes-branded ads are being told they'll be under secondment to Skytraders.

[Lead Balloon]

Interlocutory hearing relating to Bonza administration process is listed in the Federal Court for 9am (Sydney time) this morning. Should be broadcast on YouTube. Details here (https://www.fedcourt.gov.au/court-calendar/daily-court-lists/nsw).

[nomess]

Microphone drop

On 21 May 2024, the Administrators were informed by 777 Partners, who we understand to be the ultimate holding company of Bonza and 777 Holdco domiciled in the United States, that it may wish to propose a Deed of Company Arrangement (DOCA) to restructure the Companies as a group. The Administrators have not yet received a proposal for a DOCA from 777 Partners.

Well that’s no surprise. The Americans have considerable financial exposure to this no matter which way it swings, be it DOCA or Liquidation. It’s all about trying to reduce the financial damage.

I can only think of two potential interested parties. Someone wanting to run a wet leasing operation, before Skytrans joins the party, or someone wanting to copy MinRes. Either way, CASA will have a field day with any new owner.

[neville_nobody]

Either way, CASA will have a field day with any new owner.


Well if they are stupid enough to create ridiculous legal precedents they’re not going to be able to put the genie back in the bottle now.

Somehow though I can’t see anyone else giving this business a run. There just isn’t enough patronage outside of the capital cities.

[nomess]

Somehow though I can’t see anyone else giving this business a run. There just isn’t enough patronage outside of the capital cities.

You won’t see purple jets buzzing around the countryside again. It’s a fantasy and it’s over.

I can see someone wanting to start a wet lease operation however. They won’t be purple and they certainly won’t be selling budgie smugglers. However, it gets messy as they won’t want all the financial baggage. All they want is, the AOC, Manuals, and somewhat something of a Flight Ops Department.

Price? Wouldn’t be much. $10-20m with no debt tied to it.

[Lead Balloon]

The counsel for the administrator seemed to me to be a bit short of knowledge and therefore unhelpful to the judge in understanding the regulatory consequences of a change of control of the AOC-holding entity. (Remember: There can be no ‘new owner’ of an AOC. The AOC can only ever be held and owned by one person. Assets owned by a company are not owned by the shareholders.)

At one stage the judge raised the question whether CASA has a power of veto over share sales resulting in a change of control of an AOC-holding entity, the answer to which is clear, and counsel seemed to fudge it. Then there was a discussion between the judge and counsel about how important the pilots are to aviation safety - an obvious but largely irrelevant conclusion in the circumstances, because I’m not aware of any circumstances in which CASA has moved to suspend or cancel an AOC merely on the ground, alone, that an AOC-holder has no pilots temporarily. (Are any of Bonza’s pilots actually hanging around? I would have thought they’d skip to greener pastures ASAP.)

The gnarly regulatory issues are about who the key personnel – including the CEO – will be and what the chain of command and other arrangements fundamental to safety will be after the change in control, and whether CASA considers all that appropriate. That and the minor issue of financial viability.

If I were a potential buyer of the controlling interest (no chance of that, as I don’t want to risk making a small fortune out of aviation) I’d be seeking assurances from CASA about whether my proposed key personnel and chain of command and all the other proposed arrangements relevant to holding an AOC, and financial viability, would attract regulatory flies. I imagine that even if the answer from CASA was that my proposed arrangement are OK in principle, it would be qualified with: But of course we have to first be satisfied that the proposed arrangements have been implemented by you and are working in fact.

[43Inches]

(Are any of Bonza’s pilots actually hanging around? I would have thought they’d skip to greener pastures ASAP.)

How do redundancy payouts go if you quit during administration, that is before the company is officially wound up? I assume some were there longer than 12 months so entitled to something...

[nomess]

I’m not aware of any circumstances in which CASA has moved to suspend or cancel an AOC merely on the ground, alone, that an AOC-holder has no pilots temporarily.
That is a murky area and is generally dealt with on a case by case basis from Canberra.

I understand Virgin kept the Tiger AOC inactive without any personnel attached to it, however I’ve since been told it’s now been cancelled and is officially dead.

[Ollie Onion]

How do redundancy payouts go if you quit during administration, that is before the company is officially wound up? I assume some were there longer than 12 months so entitled to something...

If you quit then you are not eligible for anything, having said that redundancy payouts are generally way down the creditor list.

[Lead Balloon]

That is a murky area and is generally dealt with on a case by case basis from Canberra.

I understand Virgin kept the Tiger AOC inactive without any personnel attached to it, however I’ve since been told it’s now been cancelled and is officially dead.Every RPT AOC is dealt with on a case by case basis by 'Canberra' (CASA head office).

I said the AOC holder having no pilots "temporarily". Are you aware of how long Virgin "kept the Tiger AOC inactive without any personnel attached to it" before the AOC was cancelled, or of why CASA cancelled it?

[longlegs]

Bonza for the win!

https://www.onboardhospitality.com/onboard-hospitality-awards-2024-winners-revealed/WinnersLow Cost Carrier: Gold: BonzaFull-service airline: Gold: Hawaiian Airlines
Silver: Air France
Bronze: Malaysia Airlines

[markis10]

Gold Coast Airport are exercising their rights under their Conditions of Use.

https://cimg3.ibsrv.net/gimg/pprune.org-vbulletin/952x1673/screenshot_20240511_180729_adobe_acrobat_9d3c9451b523f787a49 c4b9a7e4d3f3f956dc477.jpg



However, their conditions should not prevail over the requirements of the Corporations Act 2001 with regards to paying out creditors; simply put, you cannot contract around the law. The airport cannot obtain preferential treatment regarding payment of their debt; they'll be treated as a unsecured creditor and gets cents on the dollar, maybe nothing, just like every other unsecured creditor. If push came to shove, the Aircraft Lessor will get a court order requiring the airport to release the aircraft, and they would likely get a costs order against the airport as well. If the airport persists it will ultimately be a matter for the court.

Last aircraft is being held hostage by OOL still, remarkably short sighted action by OOL management, seeking to be a preferential creditor. I am sure leasing circles are abuzz with the news of the treatment, future leases worldwide are likely to have OOL and associated airports excluded from operations of said assets in the future because of this action, which will be more costly by far than any BONZA bill.

[TBM-Legend]

Last aircraft is being held hostage by OOL still, remarkably short sighted action by OOL management, seeking to be a preferential creditor. I am sure leasing circles are abuzz with the news of the treatment, future leases worldwide are likely to have OOL and associated airports excluded from operations of said assets in the future because of this action, which will be more costly by far than any BONZA bill.

you’ve been drinking perhaps! The leasing companies don’t black ban a tinpot show like Gold Coast airport over this and “tell the industry”. The issue is up to Hall Chadwick to resolve this possibly by legal matters or mediation.

[No Idea Either]

No they won’t ban it, but they’ll litigate it and GC might find themselves with a hefty bill…..

[Zhoottoo]

Think QAL and their lawyers will find that Australia being a signatory to the Cape Town Convention and a 777 Partners entity being the secured creditor on the international register is all that matters...Cape Town Convention and Protocol Introduction The Convention on International Interests in Mobile Equipment (https://www.icao.int/sustainability/Documents/CPTConvention_AnnexA.pdf)(pdf) was concluded in Cape Town on 16 November 2001, as was the Protocol on Matters Specific to Aircraft Equipment (https://www.icao.int/sustainability/Documents/CPTConvention_Protocol_AnnexB.pdf)(pdf). The Convention and the Protocol, adopted under the joint auspices of ICAO and UNIDROIT, shall be read and interpreted together as a single instrument (Article 6(1) of the Convention).

The primary aim of the Convention and the Protocol is to resolve the problem of obtaining certain and opposable rights to high-value aviation assets, namely airframes, aircraft engines and helicopters which, by their nature, have no fixed location. This problem arises primarily from the fact that legal systems have different approaches to securities, title retention agreements and lease agreements, which creates uncertainty for lending institutions regarding the efficacy of their rights. This hampers the provision of financing for such aviation assets and increases the borrowing cost.

As of 16 June 2016, there are 65 Parties to the Convention. A full list of signatory parties is available here (https://www.icao.int/secretariat/legal/lists/current%20lists%20of%20parties/allitems.aspx).
Advantages of the Convention and the Protocol
Predictability & enforceability. By creating an international interest recognized in all of the Contracting States and establishing an international electronic interest registration system, the Convention and Protocol improve predictability with respect to the opposability of the securities and the interest held by sellers of aviation assets. Indeed, it is estimated, based on World Bank data, that the mean worldwide contract enforcement delay is 10 months. The ratification of the Convention and the Protocol reduces this delay to two months (Linetsky (https://www.icao.int/sustainability/Documents/AnnexC.pdf), 2009).

Cost savings. The Convention and Protocol are intended to reduce risks for creditors, and consequently, the borrowing costs to debtors, through the resulting improved legal certainty. This promotes the granting of credit for the acquisition of more modern and thus more fuel-efficient aircraft. The airlines of States that adopt the Convention and the Protocol may receive a ten percent (10%) discount on export credit premiums. For example, it was calculated that the adoption of the Convention will enable Australian airlines to save $330,000 on the purchase of a new ATR 72 and $2.5 million on the purchase of an Airbus A380 (cf. Flightglobal (https://www.flightglobal.com/news/articles/in-focus-how-new-export-credit-rules-will-change-ai-381363/)).

[ebt]

Which is all good, until the courts decide not to enforce Cape Town, as happened with Willis Lease and the Virgin engines case. India is also a signatory to Cape Town - much earlier than Australia was - but that has been an absolute shambles for the lessors in multiple cases. Similar shenanigans going on in Vietnam.

Let's be honest, the lessors know the risks and charge accordingly. What usually happens is that they clear the debt accrued by the aircraft to the airport, the airport releases the lein, lessor flies their bird away and the world still turns. In this case, as AIP Capital are a bunch of snakes (I mean, literally their main vehicle is called 'Phoenix Aviation Capital'), they appear to be refusing that, effectively creating a headache for the administrators and leaving everything in a stalemate. The longer it goes on for, the more the incentive is with AIP to just settle it, and in the meantime I am sure that OOL will happily just let it sit there, amassing more parking fees.

[MickG0105]

Which is all good, until the courts decide not to enforce Cape Town, as happened with Willis Lease and the Virgin engines case.
​​​​​​...
The Australian Federal and High Courts did not "decide not to enforce Cape Town" in the Willis Lease matter (Wells Fargo Trust Company, National Association (as owner trustee) v. VB Leaseco Pty Ltd (administrators appointed) [2022] HCA 8). The Cape Town Convention, and the associated Aircraft Protocol, are given full legal effect in Australia by virtue of the International Interests in Mobile Equipment (Cape Town Convention) Act 2013 (Cth).

For all intents and purposes, the Cape Town Convention is Australian law. The courts cannot decide to turn it on or off at their leisure.

What the two courts dealt with in the Willis/Virgin engine lease matter was the practical application of the Aircraft Protocol Article XI(2) requirement for the creditor, Willis, to be "given possession" of its assets under the Administration. Willis wanted the engines shipped back to the US, whereas the Administrators sought to fulfil their obligations by allowing Willis to take possession here in Australia. Both courts sided with the Administrators.

You can pretty much lay odds that every lease agreement written since that judgement will outline in quite specific detail the practical obligations that are attached to being "given possession" in the event of insolvency.

[nomess]

Well according to the AFR they have no buyers and tomorrow is the deadline for EOI. Staff expected to be terminated next week. Liabilities have certainly blown out from the original figure quoted.

ASIC now launching inquiries. Directors will be the firing line if traded insolvent. Tim Jordan and his CFO better have a chat to Michael James from Air Australia to get the rundown on what is about to occur next.

[Stationair8]

Just remind me what do ASIC do again?

Lassie has more bite than this mob!

[AventadorSVJ]

Met a guy the other day, he was mid way through his type rating and got the news. Feel for the guy, luckily he's been snapped up by Virgin.

[Lead Balloon]

If you’re a corporate criminal and you sit still in plain sight for long enough, the corporate watch-puppy will ferociously gum and slobber on your leg until a faint rash appears.

[TWT]

Hundreds of employees of embattled budget airline Bonza have had their employment terminated after two months without pay.

Bonza employees were summoned to a virtual town hall meeting at 10am.

Company administrators told the 323 employees they were terminated immediately.


https://www.abc.net.au/news/2024-06-11/bonza-staff-employment-terminated/103962770

[C441]

Company administrators told the 323 employees they were terminated immediately.
However as the company is still under administration, the staff will have to wait for any payment they might (not) receive for their outstanding wages including the Federal Government's payment to staff of failed businesses.

[antheads]

Apparently CASA told them doing the Flight West - Alliance trick and transferring the AOC to a new corporate entity sans debt was not allowed.

[Speed_Tape]

I honestly feel sorry for everyone involved (flying/cabin service level). I think we are a kind of collective fraternity. There were some naysayers about the operation, there were also the optimists, Another airline failure as we have seen so many times before. Too many people lining their own pockets over both their customers and staff. Good people did try to make the best of it and it failed. I feel for them.

[Stationair8]

Never a nice day for anyone when this happens in your career.

You only ever see a few cents in the dollar, if you are lucky.

[topend3]

Ironically, the Melbourne Skybus recording AND the driver announcement, both indicate when you are arriving at the terminal servicing Bonza, and this was this Tuesday. Did they not get the memo?

[Icarus2001]

You only ever see a few cents in the dollar, if you are lucky.

Things have progressed. Are you aware of the FEG? https://www.dewr.gov.au/fair-entitlements-guarantee

​​​​​​​This is a brilliant scheme for business owners whereby the Australian taxpayer pays up because they are incompetent at running a business and made no provision for staff entitlements.

[lucille]

Today’s Fin Rev (Rear Window section) has a damning article about the greed of the administrators. Apparently fees to date are $2.2M and counting.

And of course, Hall Chadwick are top of the pecking order of creditors when it comes to being paid. Meanwhile the 300 or so staff remain unpaid while these ghouls keep on keeping on clipping the ticket,

Corporate crime is apparently an honourable profession in Australia.

[AerialPerspective]

Things have progressed. Are you aware of the FEG? https://www.dewr.gov.au/fair-entitlements-guarantee

This is a brilliant scheme for business owners whereby the Australian taxpayer pays up because they are incompetent at running a business and made no provision for staff entitlements.

Yes, it is. I fell foul of an unscrupulous business which just shut up shop and said they had no money for entitlements. In fact, they took over a viable business then ran it into the ground via incompetence. The DEWR stepped in via the FEG and I got paid everything I was owed, plus up to 13 weeks unpaid wages (or rather, any wages unpaid in the last 13 weeks - lost out a couple of weeks because they were 2 weeks outside the 13 weeks but I'm not complaining).

Many people deride former Prime Minister Julia Gillard but the FEG was her work while PM.

Of course the next government watered it down somewhat but nevertheless it's still a very solid piece of legislation. Part of the deal is that in accepting the FEG payment, you sign over your debt claim to the Commonwealth who then proceed to pursue the Director(s) for the money. They don't just give you the money and leave it at that, they pursue the former Directors who now owe the Federal Government the money and thus are able to utilise the organs of the State to recover funds. The information is also passed on the ASIC for any relevant charges (e.g. trading whilst insolvent, etc.).

I wish they included Superannuation because said company did not pay SG for the best part of 3-4 years and we are all still waiting for the money while the former Directors allegedly move assets around according to some.

I had a discussion with a family member who worked in the finance industry and he was saying to me it really is about time we had new laws that state if you start a business and ANY of the profits are used to enrich family members through Director's payments and/or bonuses then regardless of whose name the resultant asset is in, it should be available for Administrators to access to make creditors whole.

Because we don't have that, too many businesses shift assets around, give money to spouses, etc. then cry poor when it goes tits up, then a few months later they're running another business. I know we have Pheonix Laws but the organisation I'm thinking about had done this previously with another business so the Pheonix Laws don't work it would appear.

Still waiting 4 years later for SG payments. The ATO is pursuing it but no one has had any communication other than the initial letter.

BTW, I shan't name it but the business(es) I'm referring to registered several companies so that they could keep employee numbers under 15 for each ACN, thereby avoiding payment of redundancy. Another little bit of bastardry that should be stopped.

[AerialPerspective]

Today’s Fin Rev (Rear Window section) has a damning article about the greed of the administrators. Apparently fees to date are $2.2M and counting.

And of course, Hall Chadwick are top of the pecking order of creditors when it comes to being paid. Meanwhile the 300 or so staff remain unpaid while these ghouls keep on keeping on clipping the ticket,

Corporate crime is apparently an honourable profession in Australia.

Yep. This and the Legal profession need to be reformed. With the latter, we can start by ditching those stupid wigs and charging $5 per sheet for a photocopy or scan.

The law says that employees are at the top of the list ahead of all other creditors. They should be made whole before Administrators get paid methinks.

[AerialPerspective]

I honestly feel sorry for everyone involved (flying/cabin service level). I think we are a kind of collective fraternity. There were some naysayers about the operation, there were also the optimists, Another airline failure as we have seen so many times before. Too many people lining their own pockets over both their customers and staff. Good people did try to make the best of it and it failed. I feel for them.

I agree, the people who start these things though really need to be given a proper definition of 'due diligence'. Isn't CASA supposed to assess the viability of a prospective AOC holder? What do they do, just look at a bank statement?