ABC Statewide Drive, Victoria with Prue Bentley

PRUE BENTLEY: On the text, “I purchased return tickets to the Gold Coast only three days ago. Family of four in the July school holidays, $1,500. It’s ethically and morally reprehensible that they were able to sell these seats when they must have known the financial situation the company was in.” That’s from Helen in Howlong, New South Wales. Thank you for texting in. I’m sorry to hear that. I’m not sure what the situation is going to be for your tickets now, but with me now is Catherine King, the Federal Minister for Transport. 

Catherine King, good afternoon. Thanks for joining us today.

CATHERINE KING: Good afternoon, Prue.

PRUE BENTLEY: So, how aware were you about Bonza’s financial situation before today?

CATHERINE KING: Well, certainly the first we were aware that flights were being cancelled was early this morning with media reports. Obviously, there was a report in the Australian Financial Review last week that the investors had asked KordaMentha to talk to Bonza. I think that had come as a surprise to Bonza as well. We have been in some discussions with Bonza over the course of the week and have certainly been in discussions with them about what their future is. They’ve obviously taken the decision today to go into voluntary administration and it will be now up to the administrators as to whether they can continue to trade while they’re in that period. And we expect to hear some more from the administrators about that shortly.

PRUE BENTLEY: So, what is the impact on people like Helen who just texted in about the tickets that she purchased just three days ago?

CATHERINE KING: Well, certainly Bonza should not be selling tickets at the moment, and I understand that is now no longer the case. It was earlier this morning and so we raised that with them fairly early this morning. In terms of the tickets she’s purchased, she’s got a couple of options. The first is obviously she can contact her bank if she paid for them by credit card, there might be an option to stop that payment. So, that might be an option she should get onto fairly quickly, in case that payment has already gone through. But it may not have gone through yet. So, I would encourage that to be the first thing. Then obviously head to the ACCC website. There’s information about what happens in the event of voluntary administration. 

Now, obviously, if the administrator says that they can continue to fly, they’ll need to make some decisions and announcements about that. Then hopefully by the time June comes, those tickets are honoured and she can continue on her way. If they decide they can’t continue to fly and she’s not able to get her money back through the credit card, then unfortunately she becomes a creditor to the company. If it is wound up. That is normally the case in a voluntary administration like that. So, there’s a few options there and I’d encourage the person whose text you in, hopefully who’s listening in that, to try the bank credit card thing first. Do that fairly quickly. If not, then head to the ACCC website and there’s some information about what happens when a company goes into voluntary administration and what your rights are as a customer.

PRUE BENTLEY: If they are able to continue to trade, do you think people will trust them? I mean, their reputation is tarnished now.

CATHERINE KING: Well, look, really, again, that’s a matter for them. This is obviously something that’s happened fairly quickly. They’re a new airline. They’ve been operating for about 14 months in the Australian market. They’ve had a particular business model of selling very, very cheap tickets, particularly in regions, and it’s been great. As a regional MP, they haven’t come to me. We don’t have an airport that can fit their flights in, but I know for many regions it’s been a great opportunity to showcase their region and have flights that have been cheaper and available. But that’s their model that they’ve operated under and obviously that’s proved to be very challenging for them.

PRUE BENTLEY: Ms. King, very shortly we’re going to speak to somebody who relies on Bonza to get to her remote work, her FIFO work in Queensland from regional New South Wales. As the Transport Minister and the Regional Development Minister, what kind of impact does losing or potentially losing a service like this have on regional economies and productivity?

CATHERINE KING: Yes, well, obviously we’ve got a number of airlines that do flow into our region. So, Rex has been a really longstanding player in the marketplace and has an important role to play, particularly for our regions, but they also fly into some of the capital cities as well. And I know the slots reforms that we’ve done at Sydney Airport will also be of interest to Rex as well. We obviously have QantasLink that fly into some regions as well as Jetstar and Qantas itself. So, we do have airlines that fly in. Obviously, the issue with Bonza has been they’ve had a model where they’ve had, in some instances, people flying on $30 tickets to the Gold Coast, which is terrific if you’ve been able to do that. But that’s the model that they’ve operated on and that’s obviously been a model that’s fairly challenging for them.

PRUE BENTLEY: They have increased competition, though, in our domestic market, which is notoriously expensive because of the few players in the system. Do we need to have a look at that?

CATHERINE KING: Well, look, obviously through the Aviation White Paper, the Government is looking at issues of competition and obviously the biggest thing we have done to date is the slots reform at Sydney Airport. That is the first time that’s been done in 27 years. The Aviation White Paper is the first White Paper that we’ve had since the Prime Minister was last the Transport Minister, and that’s a 12- to 13-year period. But we haven’t actually looked at aviation as a whole. There are things that government can do, but we’ve also got to remember a small market. 

Despite the fact that we travel a lot, we are a relatively small market in terms of the number of domestic passengers that we have. And so the challenge is in a sector that has got lots of costs, and there are lots of costs associated with flying planes, both in terms of staffing and fuel and all of the logistics that go with that. We are a small market and we’ve got to bear that in mind as well. It’s important that we have the two big airlines in Virgin and Qantas competing with each other. And Virgin’s making its way back through a period where it’s had quite a bit of difficulty leading through COVID and leading into COVID as well. And we’ve obviously then also got Jetstar as a lower cost carrier and Rex that are important as well, as well as some smaller players that have been in the marketplace in some of our regions for a long period of time.

PRUE BENTLEY: Minister, is there a role for the Federal Government to step in? Jeff in Wangaratta has pointed to some tougher rules around airline refunds in the US, where the president has given passengers an automatic- has decreed effectively that airlines have to give passengers an automatic refund when their flights are cancelled or significantly delayed. I know that that would be a very different scenario for Australia, but is that the sort of thing that the White Paper is also looking at?

CATHERINE KING: Yeah, absolutely. We’ve certainly – the issue around, you know, we had a lot, we’ve had lots of complaints about this quality of service, the difficulty of flight credits, the difficulty of refunds, the difficulty of frequent flyer point programs, and the lack of transparency around those. There’s been a lot of complaints about that. So, we will have something to say about Consumer Rights. And obviously, under Australian Consumer Law, people do have rights to have the access to the service that they’ve paid for. Obviously, if a company goes into voluntary administration, then that becomes a different issue. But there are consumer rights, but whether we can strengthen those is certainly something the Government’s looked at. The challenge we’ve obviously had with schemes around compensation is that you then have, airlines will risk factor that into the price of airline tickets. And in a small market, that can mean we can see airfares increasing. So, we’ve had to bear all of that in mind about what is the best way forward with that. But the Aviation White Paper does cover some of those issues.

PRUE BENTLEY: Catherine King, thank you so much for your time.

CATHERINE KING: Really good to be with you. Can I just put in a plug? There is a hotline, if people are stranded, that my department will be on the line until 10:00pm. Tonight, 1800 069 244 for any Bonza passengers who have already made their first leg or in their mid-leg of their journey to try and help get you home.

PRUE BENTLEY: Thank you so much for your time.

CATHERINE KING: Thanks Prue.

PRUE BENTLEY: Catherine King is the Federal Minister for Transport. Clearly a bit of a headache for her this.