Bonza Airline Discussion

[tcasfail]

Left over Nescafe Instant at MCY offices.

DNATA catering have already taken that back

 

[Saab34]

One for the legal and finance heads.

Can they sell it off via a DOCA for xx price but without the debt? Obviously nobody wants the debt here, with a $80m loan tied to 777 Partners at pretty ugly rates, plus another $40m in other debt. Seems to be a very costly AOC with no aircraft. Could someone buy it for say $20-30m? And have the rest of the balance sheet wiped?

I still don’t know what someone would do with it. Perhaps one of the mining players picking it up to operate FIFO?

 

[HS-TQE]

I heard there’s value in the AOC but no idea how that works without people and aircraft…?

Not many would be interested in a debt-ridden AOC unless if they're desperate enough to get into the Australian domestic market (i.e the infamous "How to make millions in the Airline industry? - start as a billionaire" quote)

 

[elanshin]

I doubt anyone actually wanting to try the aussie market will touch Bonza. Might as well start new than start with negative reputation, debt and no serious assets.

If they had planes then that might've been a consideration.

 

[Ansett]

But they could utilise the AOC and rename at some point?

 

[SYD]

But they could utilise the AOC and rename at some point?

and that’s what I heard on the news that the administrators were hoping to do. But again, no idea how you carve out that to make it viable? Or it’s a $1 dollar worts and all deal? (Including staff and obligations)

 

[Saab34]

and that’s what I heard on the news that the administrators were hoping to do. But again, no idea how you carve out that to make it viable? Or it’s a $1 dollar worts and all deal? (Including staff and obligations)

You couldn’t pick this up with its current liabilities. Which moves back to my original question, can you just buy the airline, without all the liabilities?

I am still at a loss in regards to what market any future buyer would be targeting to make money.

All I can think off is a mining operator wanting it to run its own network, we are seeing some shift in large clients not wanting to work with Qantas over that way, one client is already starting its own charter company.

 

[UP4014]

If you were an overseas airline wanting some local domestic action, it would be a cheap entry. On the other hand if you don't have a few spare aircraft it will likely send to the bankruptcy court.

 

[jb747]

I heard there’s value in the AOC but no idea how that works without people and aircraft…?

For the life of me I don't understand how CASA could actually allow an AOC to be transferred like this. You have to jump all sorts of hurdles, and show lots of capabilities to actually get one. Anyone buying it would not have done so, which really makes the entire thing worthless...unless CASA are really stupid and actually don't look at the owners again.

On second thought....

 

[oz_mark]

You couldn’t pick this up with its current liabilities. Which moves back to my original question, can you just buy the airline, without all the liabilities?

My understanding is that a DOCA can be used to reduce liabilities - for example returning 10 c in the dollar for existing liabilities. For a creditor, they may see that as a better option than what they'd get if it was liquidated.

 

[UP4014]

I'm happy to throw in 100 bucks and AFF can buy an airline, give ourselves some blazers to wear and use the crew lane at international.

 

[TedE]

One for the legal and finance heads.

Can they sell it off via a DOCA for xx price but without the debt? Obviously nobody wants the debt here, with a $80m loan tied to 777 Partners at pretty ugly rates, plus another $40m in other debt. Seems to be a very costly AOC with no aircraft. Could someone buy it for say $20-30m? And have the rest of the balance sheet wiped?

I still don’t know what someone would do with it. Perhaps one of the mining players picking it up to operate FIFO?

I don't know what the position is vis-a-vis security over the debt, but yes, a DOCA could release the AOC and other assets free from the debt. DOCAs have to be approved by creditors. Usually creditors would vote for a DOCA if it is likely to give them a better outcome vs liquidation.

 

[Saab34]

For the life of me I don't understand how CASA could actually allow an AOC to be transferred like this. You have to jump all sorts of hurdles, and show lots of capabilities to actually get one. Anyone buying it would not have done so, which really makes the entire thing worthless...unless CASA are really stupid and actually don't look at the owners again.

On second thought....

But if it’s the same Management, Flight Crew, Engineering, and Manuals all being used, then it’s likely less hoops to jump through, correct?

Anyone buying this is kidding themselves if they think they can get off CASA free here. You would need to go through a large part of the process again, even just for the fact that new aircraft would be arriving, plus it’s been grounded for likely a year before re starting. That’s a long time between drinks.

I do recall Bonza lost its Chief Pilot prior to closure. You can bet the large chunk of Pilots, and the whole Training Department, won’t touch this again. Especially as it’s based at MCY, doubt any new owner would be basing it there.

 

[RooFlyer]

You couldn’t pick this up with its current liabilities. Which moves back to my original question, can you just buy the airline, without all the liabilities?

I am still at a loss in regards to what market any future buyer would be targeting to make money.

You obviously don't mix with the right crowd.

Phoenix Air might be on its way.

 

[Scarlett]

Quick, someone tell Elon Musk he can start his own X airline here. He seems to not care about losing billions…

 

[Himeno]

Quick, someone tell Elon Musk he can start his own X airline here. He seems to not care about losing billions…

We don't need more cough from one of the dumbest people on the planet in this country.

 

[MooTime]

We don't need more cough from one of the dumbest people on the planet in this country.

Too right we have enough dumb ones here as it is.

 

[mrs.dr.ron]

So from todays Sunshine Coast Daily =

Creditors will be better off if Bonza is sold rather than wound up, court hears​

Administrators for grounded budget carrier Bonza have been given a two-month window to try to sell the airline as thousands of creditors sweat on the outcome.
Leave was granted by the Federal Court on Monday to extend the deadline to find a buyer until July 29, after a judge was told the failed carrier’s airline licence would probably form its most valuable asset.
A second creditors’ meeting will be held in that period after an initial meeting on May 15.
Several parties are reportedly interested in bailing out the cash-strapped airline, which went into administration with debts of about $110 million.
Barrister James Hutton SC, representing administrators Hall Chadwick, told the court that keeping the company out of liquidation would likely give creditors a better outcome.
“In the event that the company is put into liquidation, advances will be made that will cover some but not all of the employee entitlements,” he said.
If the company went into liquidation, employees might be entitled to retrenchment payouts but it was possible they might not be able to recoup their superannuation entitlements, the court heard.
More than 300 staff were stood down when the embattled airline was placed into administration in April.
Improving the likelihood of a sale is Bonza’s air-operator certificate, which authorises it to operate as a commercial airline.
Bonza’s licence might be its most valuable asset as it was not transferable and would most likely be forfeited if the company went into liquidation, the court heard.
The airline’s US-based owner 777 Partners had shown an interest in restructuring Bonza and its Australian holding company, but it was yet to put forward a formal proposal, Hall Chadwick said in a statement on Friday.
Bonza operated as a low-cost domestic airline primarily servicing regional locations in Australia.
Customers with forward bookings were treated as contingent creditors, taking the total number of creditors to 58,428.
Justice Ian Jackman said customers might be able to retain bookings for future flights if the airline continued operating.
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.​

 

[Quickstatus]

can you just buy the airline

just like any asset, it can be purchased without any encumbrance or lien.

 

[yachty]

Bonza’s administrators concede sale hopes dead, staff to go

The low-cost airline collapsed in late April. A confidential creditors’ meeting was told on Thursday that administrators may consider legal action instead.

www.afr.com

All staff to be terminated next week with no buyer on the horizon. ASIC are looking into if it traded while insolvent.

Relevant to earlier discussions in this thread:

Hall Chadwick said that through discussions with the Civil Aviation Safety Authority, it had determined the AOC would only be transferrable if the acquirer purchased shares in Bonza and that it could not be sold as a single asset. The meeting was given documents disclosing $143 million in liabilities, of which $138 million is owed to unsecured creditors, including $80 million to financiers and lessors, and $5 million to staff.

The article also said the officeholders required to keep the AOC valid have continued to be paid since the airline went into administration.