Regional airline Bonza is in turmoil with the abrupt cancellation of flights nationwide and aircraft reportedly repossessed as the carrier enters voluntary administration.
Documents filed with the Australian Securities and Investment Commission on Tuesday afternoon revealed that insolvency accountants Hall Chadwick were appointed for the administration process of Bonza's operating and holding company.
Federal Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King said she had spoken with the chief executives of both Qantas and Virgin and "both airlines stand ready to assist stranded passengers needing to get home".
"My Department has reached out to Bonza and our expectation is that they keep passengers informed of their options and their consumer rights," Ms King said.
The Federal Transport Department have opened a hotline for passengers impacted by the situation. The hotline number is 1800 069 244.
However, it is currently unknown what will happen in terms of reimbursing passengers for unused tickets.
Hall Chadwick are currently determining if it has any conflicts of interest in taking on the role. The board of Bonza has also held an emergency meeting on Tuesday afternoon.
On Tuesday morning, Bonza chief executive Tim Jordan released a statement just after 8am declaring that all its services had been grounded, leaving passengers without notice and stranded.
"Bonza has temporarily suspended services due to be operated today as discussions are underway regarding the ongoing viability of the business," said Mr Jordan.
"We apologise to customers who are impacted by this and we're working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market."
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 carrier initially offered flights between Albury, Avalon, Bundaberg, Cairns, Coffs Harbour, Gladstone, Mackay, Melbourne, Mildura, Newcastle, Port Macquarie, Rockhampton, Sunshine Coast, Toowoomba Wellcamp, Townsville and the Whitsunday Coast.
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.
