The future of budget airline Bonza appears bleak with company administrators saying there was "no alternative course of action" than to stand down 302 of the 323 total workforce up to and including May 7.
The grounding of its fleet has also been extended to at least next Wednesday, meaning a total of 183 cancelled flights and 33,000 would-be passengers stranded since forensic accountants Hall Chadwick were appointed to navigate the administration process of Bonza's operating and holding company on April 30.
Many passengers are being re-booked with other airlines who are ferrying them as close as possible to their destination at no cost.
Bonza opted into voluntary administration on Tuesday after leasing company AIP Capital took possession of its five Boeing 737-MAX-8's at 11:51pm on April 29.
The repossession was originally only in place until Thursday midnight but the aircraft will remain parked-up at various east coast airports for several more days.
An update issued by Hall Chadwick shortly after 11pm on Thursday night said it had been in constant discussions and meetings with Bonza management and key employees to understand the trading operation and cashflow requirements "of various scenarios".
"During this time, whilst the aircraft remain grounded, and there is insufficient cashflow and funding, the administrators are unable to recommence full operations," the statement said.
"The administrators also have no alternative but to stand down the majority of the employees of the company, pending the outcome of these above ongoing discussions. Some employees will continue to assist the administrators with their efforts.
"The administrators appreciate this is not the news that the employees, customers, and other key stakeholders would like to hear however there is no alternative course of action available to the administrators at this point in time."
The statement also revealed that the notices terminating the aircraft leases were preceded by Event of Default Notices issued on April 17.
However, Bonza directors said that despite this "the action taken by the lessors was not foreshadowed or expected".
Hall Chadwick executives met with Bonza's chief financial officer on Tuesday and while the extent of the company's liabilities have not been made public due to commercial sensitivities, it was immediately announced that Bonza would be unable to issue refunds for tickets.
The administrators have also been in meetings and discussions with the lessors and key industry participants within Australia and overseas with regard to the current status of the company and a way forward for it's operations.
"The largest consideration for these parties is the current status of the aircraft, which currently remains grounded," the statements said.
It also said there had been open dialogue regarding the resumption of operations.
"Those discussions are occurring daily and will continue to take place over the forthcoming days and into next week," the statement said.
"As such the administrators are unable to resume flight operations from Friday 3 May 2024 up to and including Tuesday 7 May 2024. Customers with bookings during this period are advised not to travel to the airport."
As of 3pm Thursday, a special hotline set-up by the government had received around 2,800 calls from Bonza passengers, of those Jetstar has made about 1,780 re-bookings, Virgin 1,250 and Qantas 580.
Federal Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King said the government, Virgin and Qantas had helped thousands of stranded passengers.
The 1800 069 244 hotline will close at 5pm on Friday. Following that Bonza passengers are encouraged to contact Qantas directly on 13 13 13, Virgin Australia on 13 67 89 and Jetstar on 13 15 38.
On Tuesday morning, Bonza chief executive Tim Jordan released a statement declaring that all its services had been grounded.
"Bonza has temporarily suspended services due to be operated today as discussions are underway regarding the ongoing viability of the business," said Mr Jordan.
The Civil Aviation Safety Authority gave the low-cost airline the all-clear for takeoff in January last year.
However, the financial position of the airline has been a matter of ongoing speculation as it struggled with a relatively small fleet of just four Boeing 737-MAX-8 aircraft while it was also wetleasing two aircraft from Canadian budget airline Flair.
The business began by running 27 routes between 16 destinations across the eastern seaboard.
However, it announced last July that it was already slashing the number of routes to 22 due to low patronage, cancellations and a series of unfortunate bird strikes which all contributed to an increasingly unreliable service.
Bonza's inaugural chief operating officer Carly Povey also quit in October last year.
It was recently reported that outside consultants had been brought into the Bonza tent to assist with a company restructure.
It has also had to work through issues around the expiry of so-called honeymoon-period deals with airports and the navigating of long-term leasing contracts with its US-based owners 777 Partners.
Creditors of the private equity company reportedly took control of 30 MAX-8 aircraft on the organisation's books this month. It has previously been reported that 777 Partners were subject to court action in the UK for allegedly unpaid aircraft leasing fees and damages.
