Hundreds of workers have officially been sacked from budget airline Bonza after administrators failed to find a buyer to bail out the grounded carrier, which .
Administrator Hall Chadwick told more than 300 staff in a virtual town hall meeting on Tuesday morning that their employment would be terminated.
It came after interested parties had been set a deadline of 7 June to submit a purchase proposal, but no binding offers were lodged.
“While this is not the news stakeholders wish to hear, the administrators must make a decision with respect to the stand down of the employees,” Hall Chadwick said in a statement.
“Furthermore, customers need certainty regarding the operation of future flights. “As a result, the administrators have no option but to terminate all employees and cancel all future flights.”
Workers had been stood down without pay since April when the airline went into administration after its fleet of Boeing 737-8 planes was repossessed by lessors with debts of about $110 million.
Hall Chadwick said Bonza’s future was still to be determined as a third party could put forward a deed of company arrangement proposal that would set out a plan to keep the company going.
The administrators continue to investigate the airline’s financial affairs and will convene a major meeting with creditors to decide its future once they are completed.
Bonza is yet to enter into liquidation. In May, the Federal Court extended the deadline for Bonza to find a buyer until 29 July.
If the company was placed into liquidation, employees would be entitled to payments through the federal government’s fair entitlements guarantee scheme.
However, hindering liquidation is Bonza’s possession of a valuable air operator’s licence, which is not transferable and would most likely be forfeited if the company went into liquidation.
The Transport Workers Union said it was ready to support workers as they navigated the entitlements process and called on the government to establish a commission to rebuild the industry’s workforce.
“This is incredibly difficult news for Bonza employees who have received no pay for more than two months after the airline’s sudden collapse,” the union’s 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.”
Virgin Australia has offered to prioritise roles for workers who have lost their jobs at Bonza.
Bonza operated as a low-cost domestic airline primarily servicing regional locations in Australia.
Creditors were told at their first meeting that the airline owed almost $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.