Bonza Airlines Gets 2-Month Extension To Find Buyer, Avoid Liquidation

To find a buyer and stave off liquidation, the Federal Court on Monday gave the administrators of the defunct budget airline Bonza a two-month lifeline.

The prolongation gives creditors facing millions in losses and the airline's 300 stood-down employees a glimmer of hope. Although Justice Ian Jackman recognized the strain this put on the staff, he stated that the additional time was "appropriate" in light of the situation.

"The administrators will need time to consider the offers received and elect which if any, they intend to proceed with," Justice Jackman told News.com.au.

Bonza's lawyer James Hutton, speaking on behalf of the company's administrator Hall Chadwick, pleaded in court for the extension in an attempt to keep Bonza from going bankrupt.

"Your honor could reasonably anticipate the extension of the administration or the convening period so as to enable an extension of the administration has the very real prospect of significantly improving the position of creditors, including employee creditors," he said, according to Veritastech Pilot Academy.

The demise of Bonza highlights the difficult circumstances facing low-cost carriers in Australia. It's hard for new companies to get traction because of the greater distances, low population density, and dominance of existing airlines like Qantas.

Although Bonza's tiny presence means competition on key routes is unlikely to see a significant shift, rural routes lose a possible lifeline. This is simply the most recent in a long series of Australian low-cost airlines that have collapsed, underscoring the enormous difficulties they confront.