Bonza managing director Tim Jordan has said the airline needs at least 10 planes to become profitable. It has opened routes – largely where major airlines do not fly – to service budget-conscious leisure travellers.
But there appears to be turbulence.
The budget airline backed by Miami private equity firm 777 Partners,
has cut flights from the Gold Coast, and an aircraft that was meant to be based at the Queensland airport remains grounded.
From 01 May, Bonza will reduce the number of flights from Melbourne to the Gold Coast to one a week, and increase flights to the Sunshine Coast – where it has another two aircraft based – to five a week.
It has also reduced flights from the Gold Coast to Launceston from three to one a week, and scrapped its Gold Coast to Mount Isa service in May and June. The changes follow the closure of five routes in July, six months into its operations.
The Boeing 737-MAX aircraft, which was meant to be based at the Gold Coast, has been grounded since March, when it was redirected from Canadian low-cost airline Flair to fly in Australia.
A Bonza spokeswoman said the plane required re-certification from the Civil Aviation Authority after being transferred from Flair, a process she said had taken longer than expected. The aircraft currently remains registered as flying for Flair.
Bonza had been wet-leasing an aircraft from Nauru Airlines, which abruptly cancelled flights this week.
Bonza and Flair are backed by Miami-based private equity firm 777 Partners, which was stripped of its planes by New York-based funder A-Cap this month. Financiers to 777 and Bonza have called in corporate restructuring house KordaMentha to assess the airline’s operations. A Bonza spokeswoman confirmed that the airline’s fleet of 737-MAX 8 planes had been transferred to a new company, Phoenix Aviation Capital, which is wholly owned by A-Cap.
Phoenix will be operated by AIP Capital, which is 51 per cent owned by its management. A-Cap took control of the remaining 49 per cent from 777 this month, in a move that also had it take charge of 30 Boeing 737-MAX 8 planes.
Leasing rates for narrow-body aircraft have rocketed since 777 acquired the planes during the depths of the COVID-19 pandemic. The Bonza spokeswoman said 777 would continue to back the airline financially and that its long-term lease agreements remained in place.
But Bonza has faced problems in expanding its fleet in an extremely tight leasing market.
There are also questions over the financial standing of 777 – which is being sued by Irish lessors over unpaid aircraft leases, pursued by the US Justice Department over money-laundering allegations and to whom A-Cap has withdrawn a funding line.