Bonza has its AOC
According to another site Nauru terminated the wet lease agreement the other week effective immediately. One would assume late or no payment, which indicates lack of cash available. Not many other reasons one would terminate a contract.
Seems accurate, as they have chopped the schedule back to only work with one of its own aircraft.
No idea which way this is all going. Not looking flash. It seems doubtful that it will last much longer, unless someone tips in some cash.
Seems accurate, as they have chopped the schedule back to only work with one of its own aircraft.
No idea which way this is all going. Not looking flash. It seems doubtful that it will last much longer, unless someone tips in some cash.
Dont doubt you but I hope not. Will just further strengthen duopoly and screw the punters.
Certainly have concerns in the longer term around regional travel and what affordable travel looks like.
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KordaMentha had been sent in to ‘review’ operations.
I think survival is a matter of weeks not months when you go over the numbers which have been announced recently, rough numbers would have it at least burning $1m per week alongside ad hoc bills along the way which are normally on the millions.
Get out folks. I assume many have a Virgin return date inside (?)
I think survival is a matter of weeks not months when you go over the numbers which have been announced recently, rough numbers would have it at least burning $1m per week alongside ad hoc bills along the way which are normally on the millions.
Get out folks. I assume many have a Virgin return date inside (?)
Last edited by nomess; 18th Apr 2024 at 01:13.
https://www.afr.com/companies/transp...0240418-p5fkot
Once the punters hear that, bookings will fall off a cliff, the rest is then inevitable.
Once the punters hear that, bookings will fall off a cliff, the rest is then inevitable.
I read an article about 777 Partners in Air International and i shook my head at the wunderkinds that were going to reinvent the aviation wheel. Statements such as " We see Bonza as being so many other things because it's the brand we have created around the consumer, and so the airline is really the ticket to the game, but you are already seeing the evolution of Bonza. Yesterday it is airlines and holidays; tomorrow, it's going to be a travel marketplace......" and the rest will be history.
Last edited by Lookleft; 18th Apr 2024 at 08:41.
https://www.afr.com/companies/transp...0240418-p5fkot
Once the punters hear that, bookings will fall off a cliff, the rest is then inevitable.
Once the punters hear that, bookings will fall off a cliff, the rest is then inevitable.
Any chance of posting the text?
Cheers.
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KordaMentha runs the ruler over Bonza as its Miami PE owner wavers
Matthew Cranston and Ayesha de KretserUpdated Apr 18, 2024 – 5.22pm,first published at 10.31amSave
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4 minNew York/Melbourne | Bonza’s financiers have called on restructuring advisory KordaMentha to provide them with advice about the ongoing operations of the country’s fourth-largest airline amid instability at its Miami-based private equity owner.
Bonza launched in January last year, after more than a year of planning, flying to regional destinations including Cairns, Gladstone and Albury. It is not flying to Sydney or Brisbane, although it has services to Melbourne.
The airline is not in administration, and two sources close to the matter but unauthorised to comment publicly said it would be more accurate to describe KordaMentha’s role as advisory in nature. A spokeswoman said KordaMentha had not been appointed “as financial advisors to Bonza, or in any other capacity”.
KordaMentha’s work is being led by Sebastian Hams, a restructuring partner who has worked with Ansett, Virgin Australia and the Whyalla steelworks.
A Bonza flight in Melbourne on Thursday. Some of its ultra-cheap services have proved very popular. Others are less full. Eamon GallagherSources said A-Cap, a New York-headquartered insurance group, had provided a debt facility to 777 Partners, Bonza’s major shareholder, which it has since withdrawn. A-Cap had been directed by the Bermuda Monetary Authority to no longer provide finance to the airline because of complications arising from its investment in 777, they added.
A-Cap has also taken a 49 per cent stake in 777’s AIP Capital division, which was once part of the private equity firm and continues to hold most of the aircraft flown by Bonza. The other 51 per cent of AIP Capital is owned by management.
777 has been under serious strain after its own creditors, including A-Cap, pushed to take control of assets. The Justice Department in the United States is also investigating whether 777 – which owns the Genoa, Sevilla and Melbourne Victory soccer teams and is trying to buy Everton – violated money-laundering laws.
A KordaMentha spokesman declined to comment.
On Thursday, Bonza flights remained in the sky. One flight, from Toowoomba to Melbourne, was about 75 per cent full. Some of its services are less popular, although others – like that from Melbourne to Port Macquarie – have been a hit with travellers.
At Melbourne airport, Caitlin Ruke said that she had been waiting for the flight to be added before booking a trip to Port Macquarie. “It’s a direct flight from Melbourne and with a newborn child it’s pretty hard to get there otherwise,” Ms Ruke said.
Another traveller, Tony Spouse, said Bonza’s irregular schedule meant he had spent more time in Melbourne than he had wanted to, but “even with an extra night’s accommodation it was cheaper than Qantas”.
There has been growing scepticism about Bonza’s operations after the airline grounded one of its planes at the Gold Coast. A spokesman said last week that Bonza was waiting on re-certification from the Civil Aviation Safety Authority after the aircraft was permanently transferred from 777’s Canadian airline, Flair. However, aviation industry sources said missed lease payments had led to the aircraft’s grounding.
Tim Jordan is the chief executive of Bonza. He said 777 invested in the airline because “they could see the opportunity”. Lindsay MollerBonza had also wet-leased Boeing 737s from Nauru Airlines, which abruptly terminated the agreement on Monday, leaving travellers in Queensland stranded. Aircraft lessors based in Ireland have separately sued 777 over unpaid bills.
A spokeswoman for Bonza blamed delays returning the aircraft grounded on the Gold Coast for the cancellations. “Chartering an aircraft through Nauru Airlines was always temporary, and we’re grateful for the support and partnership of our mates at Nauru Airlines,” she said. “At times our schedules do not line up with their availability and unfortunately a small number of flights – seven – have been cancelled this month.”
Between them, Bonza and Regional Express, the domestic carrier better known as Rex, have 7 per cent of Australia’s domestic aviation market.
The Australian Financial Review’s Street Talk column reported last year that 777 had considered bringing in new capital partners for Bonza, placing a $100 million valuation on the airline. “Our differentiated strategy has captivated the imagination of individual customers, the community and also, potential investors,” Mr Jordan said at the time.
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It appears they have today reduced OOL flying to one flight per week for most, and axing a few others. That should assist the cash burn, but revenue falls off a cliff. Not really a win win situation.
Some questions to be asked around financial health and the AOC process. You need to prove to the regulator that you can provide a stable financial operation for at least 3 years. CASA requires at least 3 years cash flow forecasts, and details around cash flow shortages and solutions during the initial years. Wet Leasing or Engineering cost blow outs, need to be proven that they can be dealt with as required.
To have Sebastian Hams from Korda Mentha now getting involved, only 12 months into operations, is unacceptable. If you think this is just a "financial advisor" role, operations normal, you are delusional. By all means, I hope I am wrong, but some serious questions need to be asked if this collapses. It should a) Have never ever been approved and b) what cash details did they submit?
Advising CASA that 777 Partners has plenty of cash and will fund us for years ahead is not a claim that I find foreseen. What happens if they simply cut you off? Who can provide the funds to safety continue to operate. I also have concerns about over forecasting the success of this model also.
Many questions to be asked here.
Some questions to be asked around financial health and the AOC process. You need to prove to the regulator that you can provide a stable financial operation for at least 3 years. CASA requires at least 3 years cash flow forecasts, and details around cash flow shortages and solutions during the initial years. Wet Leasing or Engineering cost blow outs, need to be proven that they can be dealt with as required.
To have Sebastian Hams from Korda Mentha now getting involved, only 12 months into operations, is unacceptable. If you think this is just a "financial advisor" role, operations normal, you are delusional. By all means, I hope I am wrong, but some serious questions need to be asked if this collapses. It should a) Have never ever been approved and b) what cash details did they submit?
Advising CASA that 777 Partners has plenty of cash and will fund us for years ahead is not a claim that I find foreseen. What happens if they simply cut you off? Who can provide the funds to safety continue to operate. I also have concerns about over forecasting the success of this model also.
Many questions to be asked here.
It appears they have today reduced OOL flying to one flight per week for most, and axing a few others. That should assist the cash burn, but revenue falls off a cliff. Not really a win win situation.
Some questions to be asked around financial health and the AOC process. You need to prove to the regulator that you can provide a stable financial operation for at least 3 years. CASA requires at least 3 years cash flow forecasts, and details around cash flow shortages and solutions during the initial years. Wet Leasing or Engineering cost blow outs, need to be proven that they can be dealt with as required.
To have Sebastian Hams from Korda Mentha now getting involved, only 12 months into operations, is unacceptable. If you think this is just a "financial advisor" role, operations normal, you are delusional. By all means, I hope I am wrong, but some serious questions need to be asked if this collapses. It should a) Have never ever been approved and b) what cash details did they submit?
Advising CASA that 777 Partners has plenty of cash and will fund us for years ahead is not a claim that I find foreseen. What happens if they simply cut you off? Who can provide the funds to safety continue to operate. I also have concerns about over forecasting the success of this model also.
Many questions to be asked here.
Some questions to be asked around financial health and the AOC process. You need to prove to the regulator that you can provide a stable financial operation for at least 3 years. CASA requires at least 3 years cash flow forecasts, and details around cash flow shortages and solutions during the initial years. Wet Leasing or Engineering cost blow outs, need to be proven that they can be dealt with as required.
To have Sebastian Hams from Korda Mentha now getting involved, only 12 months into operations, is unacceptable. If you think this is just a "financial advisor" role, operations normal, you are delusional. By all means, I hope I am wrong, but some serious questions need to be asked if this collapses. It should a) Have never ever been approved and b) what cash details did they submit?
Advising CASA that 777 Partners has plenty of cash and will fund us for years ahead is not a claim that I find foreseen. What happens if they simply cut you off? Who can provide the funds to safety continue to operate. I also have concerns about over forecasting the success of this model also.
Many questions to be asked here.
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From AustralianAviation
BONZA SLAPS DOWN REPORTS FINANCIAL ADVISORY FIRM APPOINTED
written by Jake Nelson | April 19, 2024Bonza has strongly denied reports that financial advisors KordaMentha have been appointed to advise the airline.
Media outlets including the Australian Financial Review reported this week that the consultancy firm was brought in to give operational advice.
However, in a blunt statement, Bonza CEO Tim Jordan said the carrier currently has no relationship whatsoever with KordaMentha.
“KordaMentha has not been appointed as financial advisors to Bonza, or in any other capacity,” said Jordan.
In its report, the AFR pointed to claims of financial strain at Bonza’s parent company, 777 Partners, which also owns its sister Canadian airline Flair.
Bonza is currently dry-leasing two 737 MAX 8 aircraft from Flair following a wet lease agreement to launch its Gold Coast base.
777 Partners earlier this year faced legal action from aircraft lessors over three Flair 737 MAX 8s and one 737-800 that were repossessed last March over unpaid fees.
There has also been speculation surrounding 777’s ability to complete a takeover of English Premier League football club Everton, though that deal appears to be inching towards a conclusion.
The Transport Workers Union has jumped in on the reports to reiterate its calls for a Safe and Secure Skies Commission, with acting national assistant secretary Emily MacMillan saying that regardless of Bonza’s actual situation, Australia’s aviation industry is “a hostile market for any new entrant, marked by aggressive competition and a lack of regulated standards”.
“This volatile industry has seen the collapse of Ansett, Virgin fall into administration, and Qantas go cap-in-hand to the Government, force wage freezes on workers, price-gouge customers, and take over $2 billion of taxpayer funding while illegally sacking 1700 workers,” she said.
“Record profits have returned to the industry, but travellers are still slugged with costly airfares and lacklustre service standards following the decimation of the workforce and wages over the last 15 years. Regional jobs and air travel are particularly vulnerable.
“Aviation is prone to external shocks like pandemics, natural disasters, and international conflict. Yet with no regulation, we are left to rely on privatised airports and airlines to make decisions in the public and worker interest, which is at odds with their business models and executive KPIs. It is simply unsustainable.”
Speaking to the Australian Aviation Podcast shortly after the airline’s first anniversary of its inaugural flight on 31 January, Jordan said Bonza is “not so far away” from breaking even and aims to be “well on the way” to profitability this year.
“We know that we wouldn’t exist without our investors. They absolutely jumped in,” he said.
“I spent 12 years looking for Australian investors, and we have an investor who can see the opportunity, but ultimately, they want to go on a journey towards a return on their investment, and 2024 is significant in that regard. So we’ve got to go on that journey because it’s important for us to do so.”
According to Jordan, “many people” could see the opportunity Bonza presented, though the airline had turned to overseas investors such as 777 Partners because locals were wary of the challenges posed by the Qantas-Virgin duopoly.
“Australia was the only market without an independent low cost carrier for the last decade, and of the 15 largest markets, Australia was the only one which didn’t have an independent low-cost operator, so they could see the big-picture strategic imperative for that,” he said.
“However, because of the lack of competition, the duopoly which effectively exists in Australia, many people said, ‘you will not be allowed to survive, let alone thrive, by incumbents’.”
Bonza aims to grow its fleet to nine or 10 aircraft and open up a fourth base by the end of the year.
[T]hey want to go on a journey towards a return on their investment.
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"... they want to go on a journey towards a return on their investment, and 2024 is significant in that regard. So we’ve got to go on that journey because it’s important for us to do so.”
though the airline had turned to overseas investors such as 777 Partners because locals were wary of the challenges posed by the Qantas-Virgin duopoly.
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However, in a blunt statement, Bonza CEO Tim Jordan said the carrier currently has no relationship whatsoever with KordaMentha.
“KordaMentha has not been appointed as financial advisors to Bonza, or in any other capacity,” said Jordan.
“KordaMentha has not been appointed as financial advisors to Bonza, or in any other capacity,” said Jordan.
The slightest confirmation from anyone that indicates that they ‘are sniffing around’ will cause a media frenzy, and do exactly what Icarus2001 said, bookings will just dry up as people try to avoid becoming a creditor.
What appears to be critical here, is getting access to cash. Perhaps talking to some of these agencies might assist them with that. If breakeven was approaching as they keep saying, I don’t think they would have many challenges finding a buyer. Enough data from governments and agencies has been provided to paint a picture of a heavily bleeding business.
Perhaps they did forecast to bleed heavily for the first few years. But didn’t plan on the funder to turn the tap off, essentially cutting off the airways.
Doubtless, a little game of semantics is being played by Timbo; the AFR reporting was that "Bonza’s financiers" had called on KordaMentha, so technically it is probably correct to say that KM has no relationship with Bonza per se. It is not difficult to see the bigger picture though.
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Melbourne-Mildura what a game changer in a B737 Max!
What was a Kendall MetroII and a Murray Valley Airlines Shorts 330/360 route and marginal money making route at best in the late 80’s.
Could understand a 737 Max, Mildura- Gold Coast a few times a week for tourist traffic.
What was a Kendall MetroII and a Murray Valley Airlines Shorts 330/360 route and marginal money making route at best in the late 80’s.
Could understand a 737 Max, Mildura- Gold Coast a few times a week for tourist traffic.