ABC Radio National with Andy Park

ANDY PARK: Bonza Airline customers are being told they can fly home on Qantas and Virgin Airlines after the budget airline suddenly cancelled all flights earlier today, with passengers only finding out on arrival for their flights this morning. We now know, following an emergency board meeting that Bonza has gone into voluntary administration. Bonza, of course, was launched in Australia early last year by the US private equity firm 777 Partners. But today the company that leased its jets to Bonza have moved to repossess the planes here in Australia. Joining me now is the Federal Transport Minister, Catherine King. Welcome to you, Minister.

CATHERINE KING: Thanks for having me.

ANDY PARK: When did you first hear about Bonza’s situation?

CATHERINE KING: Well, obviously there were some media reports last week that the 777 had asked KordaMentha to come and have a look at the finances of Bonza. So, we’ve been talking to them during the course of the week, but it was only this morning, with media reports that the flights had been cancelled and Australians stranded, that the Government was first made aware that flights weren’t continuing. And obviously, Bonza has now made a statement that they’ve gone into voluntary administration.

ANDY PARK: So, what steps is the Federal Government, your government, taking to ensure passengers aren’t left stranded, not just today, but in the weeks ahead?

CATHERINE KING: Yes. Well, obviously there’s a number of passengers because were at the tail end of school holidays in states that have been our primary concern today. I spoke immediately both to Qantas – and obviously via them Jetstar – and as well Virgin first thing this morning to see, and they immediately have stepped forward to say that they will bring Bonza passengers home who are stranded. There is a hotline that we’ve stood up within my Department. I’ve got public service staff there, that’ll be available and open until 10:00 p.m. tonight, and I’ll give your listeners that number. It is 1800 069 244. And staff are ready to direct people to Virgin, Qantas or Jetstar and to take them through what steps – 

Certainly, our focus is on what’s happening today. Obviously, it will be up to the administrator as to whether Bonza can continue operations tomorrow. I expect that they’ll make a statement about that tomorrow. So, again, if passengers are still stranded tomorrow or in the next couple of days and need to get home, we’ll be working to do that. But then we’re in the hands of the administrators as to what happens to the company next.

ANDY PARK: So, what assurances are you seeking now from the Bonza board or the administrators? I mean, have they asked for a bailout or any financial assistance from the Federal Government?

CATHERINE KING: Well, certainly our focus absolutely has to be on getting stranded passengers home. It will then be up to the voluntary administrators as to whether Bonza can continue to trade. Obviously, that does happen in some cases in voluntary administration. They’ve obviously got an issue with their leased planes, the four planes that they lease. But going into voluntary administration means that those planes are still here in Australia and should still be available if the administrator continues – wants to see and believes that Bonza can continue trading. So, that’s a matter for them to come forward. And then what happens next in terms of whether, you know, there’s a sale of the company, whether it’s wound up, that really is a matter for the administrators to go forward and we’ll be talking to them. 

But what I want to make sure is that Bonza is communicating with its customers about what’s happening, communicating about what options they have. Now, if it’s gone into – because it’s gone into voluntary administration, people with forward, on forward bookings, will have to join the line of creditors for this company, certainly if it’s wound up. But also, there are some options people have in terms of Australian Consumer Law, but also just seeking – if you’ve paid by credit card, there may be some options if you need to cancel your tickets, if you’ve done that in the last day or so, being able to do that as well. And again, through that hotline, advice can be provided about what options might be available to you. But particularly the focus is just trying to make sure we get people home in the next 24 hours.

ANDY PARK: Minister, under your government, an airline has folded. We’ve seen record profits from Qantas, and a request by Qatar Airways for additional flights being knocked back. We seem to have a problem about competition and reliability in this country. I don’t know, is some kind of government intervention needed? Is Bonza’s folding evidence of your government’s regulation favouring big players?

CATHERINE KING: Well, I think what we’ve got to remember that despite the fact that we are incredible travellers, both domestically and internationally, we are a very small market. And it is a small market in terms of, of the number of customers available and really, you know, in terms of what the market can bear in relation to that. We’ve got two big players in Qantas and Virgin, really important that they stay strong and that we have that both, you know, Qantas has over 51 per cent Australian-owned and has that international carrier. As an Australian company, we absolutely have to keep that. Virgin is incredibly important as well, as well as Jetstar and Rex, our regional airline. It is very challenging when you’ve got smaller players coming into the market. I hope very much that Bonza is able to be successful through this process. But we’ve obviously seen that’ll be a matter for the administrators to go through the books, understand what their liabilities are, and to look at whether they can continue to operate on the model that they’re operating on. 

What we have done as a government, though, is a few things. In terms of the domestic market, we’ve absolutely made sure that we’re doing everything we can. So, slots reforms, making sure there is available slots at Sydney Airport, they haven’t been reformed in over 27 years. I’ve already announced a significant reform to those. We’ve got an Aviation White Paper. It’s the first time one’s been done in over 13 years.

ANDY PARK: Yeah, just on that White Paper. Minister, do we expect that to be released any earlier or do you have a date on that? Because obviously Bonza’s demise might hasten the need for this White Paper.

CATHERINE KING: No, look, certainly we’re still planning to do that in the early stages of the second quarter of this year. That’s always been the plan to do that. Obviously, there’ll be some announcements, we hope, in the Budget in relation to some funding in relation to aviation overall. There’s a lot happening in the space. There’s what’s happening at our airports, there’s our airlines, there’s also consumer rights that have been subject to a fair bit of commentary and there have been issues. But again, we haven’t seen any of that work being done in terms of aviation reform, at least for well over a decade.

ANDY PARK: Minister, appreciate your time this afternoon.

CATHERINE KING: Really good to be with you.

ANDY PARK: That’s Infrastructure and Transport Minister Catherine King here on RN Drive.