CHOICE would like to hear from Bonza airlines customers who have been affected by the recent collapse of the business. Please get in touch if you’ve been left without a flight or a refund.
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Hubby has been affected. Has received no notifications from Bonza. Proof of cancellation of flight is required to get refund without $85 fee from Avis car hire.
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I was listening to an interview of a chap who was said to be aviation savvy. He said that if you look at averages, the average plane bonza was flying held 180 people. The average charge for a flight was about $100. That meant the average flight, if full, generated $18,000. However, the cost of fully refuelling their planes was in the region of $40,000.
This meant that every flight was a major loss and that didn’t take into account the flight staff, or admin staff also requires n top of landing fees. The model was doomed before it started.
Yes, but a fully fueled 737 could fly 5000 KMs, so multiple legs with multiple cabin loads of passengers. Typically, flying around with a full load of fuel for short hauls just wastes fuel because you have to burn more to carry extra load.
So airlines just don’t do that. They may put enough in for a couple of legs. And some spare for the unexpected.
I don’t think much of that aviation savvy person.
Nobody going into business would plan the expedition with estimated numbers that would necessarily mean failure, which is what you have described. They may have planned for much better numbers but could not achieve them but that leaves the question of why they could not reach the modelled figures.
There are quite a few articles that try to explain this debacle, for example:
Six reasons why Bonza failed to properly take off in Australia | Daily Mail Online
and
What just happened to Bonza? Why new budget airlines always struggle in Australia
and
Why Did Australian Airline Bonza Fail? - Australian Frequent Flyer
These explanations go into the reasons why they couldn’t reach their targets and the reasons are a much more complex picture than getting their costing model wrong from the start.
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It’s more helpful if the chap and interview can be identified and their credentials offered in support. We all hear bits of radio, TV interviews, or phone in talk back.
The content suggested may have been taken out of context. Worse if the interviewer had any reason to suspect it was unreliable and let it pass because it would appeal to their typical audience.
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We had return flights booked to Launceston. Flight down from Gold Coast has been cancelled, flight back on 17th no word but they aren’t flying so it’s cancelled for sure.
No word on a refund except for an email for creditors that talk about a form sent on the 3rd, no email received on that date and the new email just has an address for the filled out form to be sent . That email was today with the end date tomorrow (8th).
Pretty useless info, no way of getting our money back.
If you paid by credits card reasonably recently, approach the card issuer and see see if a chargeback is possible. It may worth exploring if your plane tickets were purchased within the period when a chargeback is possible:
If you took out domestic travel insurance, also contact them to see if the policy cover includes insolvencies. If you do have insurance, fingers crossed you are with one that does cover insolvencies:
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The following info comes from the Administrators - Hall Chadwick. It may be prudent to verify the information you have received is genuine, and whether there is a real need to respond by 8th?
Also refer to the following and the 8 day requirement to accept appointment of the administrator. It’s possible the correspondence received relates to the appointment only.
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Really don’t think any attempt at a credit card chargeback would work. First thing that happens when the administrators are called in is that company bank accounts are locked down.
Generally customers who are owed deposits or payment for good and services not delivered are ranked as unsecured creditors and put way down near the end of the priority list. Pretty much everyone gets paid before them until the money runs out, so they can get cents in the dollar or nothing at all.
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Hubby contacted his bank for a chargeback and a few days later received an email from the administrator, Hall Chadwick, confirming that he had been listed as a creditor (but they are are still saying that ‘the tickets may of may not be cancelled’, which is dragging out the inevitable in my view). I would be astonished if hubby gets any money back, but it was, at least, an easy way to register.
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Thanks for the comments and insights everyone. We’ll continue to follow this story, but meanwhile we’ve published this news piece with the latest info. Bonza airlines collapse: Will customers get their money back? | CHOICE
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Need for a compensation scheme
In our view, paying for a travel service and ending up with nothing is not an equitable outcome.
Is Choice suggesting compensation schemes for all cases of bankruptcy where the customers are left out of pocket? If so who pays? If not why does the travel industry deserve special treatment?
Consumers in Australia have en many protections and improvements t consumer law. There remain exceptions.
As a major industry the travel and tourism business is poorly regulated. Many have learnt over recent years, it has been to the detriment of the consumer, despite the best efforts of the ACCC. Hopefully for all those including employees, suppliers and customers who are now losers in the failure of Bonza, there will be some genuine disclosure of where all the money earned has gone, and to who’s ultimate benefit.
As it is now consumers are part of the financing of the businesses they are making bookings and advance payments to. Similar in how banks also loan money to a business. Except the bank providing a loan has a higher priority when it comes to paying out creditors ahead of customers with unfulfilled bookings.
P.S.
The current situation is not good enough. One way to put an end to the issues of loss of money when a carrier, travel agent, accomodation provider etc goes belly up. The government could mandate all funds paid by customers need to be held in an independently governed trust account until such time as the service etc is actually received.
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Is a DOCA really that likely? I think that outcome is the least probable one given the state of affairs of the business. For a DOCA to be at least somewhat of a choice, there should be at least some hope of a business trading itself out of the quagmire. I don’t think the Administrators as part of their recommendations will give much if any support to the DOCA option.
My personal opinion is that the Company will go into Liquidation with very little to no hope that unsecured Creditors will see any reimbursement.
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Perhaps the funding could be by Insurance as part of creating/setting up of the Business. Make it a compulsory requirement of a Business registration. If they don’t have it then no registration. It could be administered by State or Federal Government, similar to how Workers Compensation is run. Risk factors would determine policy cost.
Consumers also have the ability to take out domestic travel insurance. As indicated in the past by Choice, while not all policies cover insolvency of travel operators, some do.
For more expensive domestic travel or that which we hire a car, we always take out domestic travel insurance. The cost is usually inexpensive compared to the cost of the travel, but provides piece of mind in the even of travel being cancelled for some reason (and has additional benefits when hiring a car).
I am not for a compensation scheme, as insolvencies are relatively rare events compared to the value/number of travel events. As a result the cost of running the scheme may be dwarfed by the compensation paid out over time.
You solution of having it as business insurance also has merit. This would spread the risk widely and those industries which have higher risks, pay higher premiums as a result. I don’t think the scheme should be run by the government as like for a compensation scheme, the costs of running such a scheme will be far greater than payouts.
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And if you read their pdf info it has a section that says customers affect should do a charge back so it just goes in a circle and you’ll never get one. Same with the info line that set up… called many times get to where it says they will call back …never ever got a call back.
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