New airline Bonza has gone into administration, grounding flights from Newcastle to Queensland and its other regional services.
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Bonza issued a statement on Tuesday morning saying it had "temporarily suspended services due to be operated today as discussions are currently under way regarding the ongoing viability of the business".
Hours later, after a board meeting, the company founded by former Virgin executive Tim Jordan was listed in external administration on the Australian Securities and Investments Commission website.
The airline's website is no longer taking bookings.
The Australian Financial Review quoted an industry source saying the company's creditors had repossessed its fleet of Boeing 737 aircraft.
Bonza started flying from Newcastle to the Whitsunday coast and Sunshine Coast in March 2023, clocking up 65,000 passengers on the two routes in its first year.
The first-year passenger numbers suggest the Bonza flights in and out of Newcastle were operating at about 61 per cent capacity.
Bonza's demise appeared to take Newcastle Airport by surprise after the airport's management said on Tuesday morning that "we look forward to the resumption of services as soon as possible".
The budget airline scrapped five of its routes in July last year citing a lack of sustainable demand for flights and cut back its Newcastle to Sunshine Coast service from four to three flights a week.
Months later it "indefinitely delayed" the anticipated launch of new routes to and from the Gold Coast in the lead-up to Christmas.
Bonza launched in January 2023 offering flights for regional cities along Australia's east coast such as Newcastle and Albury in NSW, Mildura in Victoria and Cairns, Mackay and Bundaberg in Queensland.
The low-cost airline has operated a twice-weekly service from Newcastle to the Whitsundays.
Federal Transport Minister Catherine King said she had spoken with Qantas and Virgin executives 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," she said.
"My department is in the process of establishing a hotline for stranded passengers."
Michael Parris
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
