'Dark day' for regional Australia as Bonza sacks staff

Hundreds of Bonza workers have officially been sacked from the budget airline as administrators fail to find a buyer for the grounded carrier which has debts of more than $110 million.

Administrator Hall Chadwick told more than 300 staff in a meeting on June 11 that their employment would be terminated.

"This is incredibly difficult news for Bonza employees who have received no pay for more than two months after the airline's sudden collapse," Transport Workers' Union (TWU) national secretary Michael Kaine said

"It's a dark day for regional communities across Australia which remain isolated through unaffordable or unavailable air travel to remain connected with the nation."

Bonza operated as a low-cost domestic airline primarily servicing regional locations in Australia.

Workers had been stood down since April when the airline went into administration after its fleet of Boeing 737-8 planes were repossessed by lessors.

"Aviation has been decimated over recent years," Mr Kaine said.

"The pandemic proved the industry unfit to withstand external shocks without workers, passengers and the Australian community paying a heavy price," he said.

"Privatised airports and a powerful airline duopoly means profits, executive bonuses and share prices are protected and prioritised.

"We urgently need a Safe and Secure Skies Commission to repair and rebuild a strong, sustainable aviation industry."

The company is yet to enter into liquidation after the Federal Court in May extended the deadline for Bonza to find a buyer until July 29.

The cash-strapped airline went into administration with debts of about $110 million.

If the company was placed into liquidation, employees would be entitled to payments through the federal government's fair entitlements guarantee scheme.

"Workers remain in limbo, with the Fair Entitlement Guarantee scheme not yet available to claim their owed entitlements," Mr Kaine said.

"Today, they gained the freedom to pursue alternative full-time work, with Virgin Australia having previously committed to prioritising Bonza staff," the TWU secretary said.

"It's highly likely aviation will lose hundreds more skilled, experienced staff after being burnt so many times in this industry."

Creditors were told at their first meeting that the airline owed nearly $77 million across two loans, almost $16 million to trade creditors and another $10 million to landlords.

Other debts include more than $5 million owed in staff wages and annual leave entitlements and $3 million to government authorities such as the Australian Taxation Office.

With Australian Associated Press