Among more than a dozen smaller regional airlines that went bankrupt over the last two years is the Australian low-cost carrier Bonza.
Launched in 2021 in the country’s Sunshine Coast, it was envisioned with the goal of serving an undertapped market of travelers flying from or into the region north of Brisbane in Queensland, as well as to other rural and regional cities too small to be served by larger airlines.
While over 650,000 travelers booked and flew on Bonza within the first year of it starting service in 2023, the airline entered voluntary administration, the Australian equivalent of Chapter 11 proceedings, in April 2024 while also terminating all of its employees and canceling dozens of flights across Australia.
The airline was placed in liquidation by a judge after failing to find a buyer by July of the same year. The bankruptcy came after Miami-based 777 Partners, the investment firm financing the airline’s launch, started running into financial problems of its own and stopped supplying it with funds.
Bonza’s low-cost airline dreams end in bankruptcy, investor fraud charges
In a development last week, the FBI charged 777 Partners Co-founder Joshua Wander and Chief Financial Officer Damien Alfalla with fraud of over $500 million. Alfalla pled guilty to participation and is cooperating with the investigation into his former partner.
According to the charges filed in the Southern District of New York by attorney Jay Clayton, Wander used his role at the company “to cheat private lenders and investors out of hundreds of millions of dollars by pledging assets that his firm did not own, falsifying bank statements, and making other material misrepresentations about 777’s financial condition.”
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Homeland Security Special Agent Ricky J. Patel described both Wander and Alfalla as promoting “an illusion of stability” when in fact the airline was “a years-long house of cards” in which both investors and beneficiaries like Bonza were misled about its financial state.
The company also invested in Canadian airline Flair Airlines.
Bonza
Alleged Bonza scheme “was self-serving, siphoning funds meant for victims”: FBI
“This alleged scheme was self-serving, siphoning funds meant for victims and leaving investors and lenders holding the bag,” Patel wrote further.
Earlier reports claimed that Wadner specifically targeted “new sectors with less certain cash-flow profiles, including streaming platforms, airlines, and professional sports teams such as Sevilla FC and Genoa CFC.”
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The specific charges against Wadner include wire fraud, conspiracy to commit wire fraud, and securities fraud and together, carry maximum charges of 20 years in prison.
Australia’s corporate regulator had earlier this year shared that it would not prosecute Bonza’s own board of directors over the sudden shutdown, as members were largely unaware of the lacking funds until creditors started coming after assets.
Hundreds of Bonza staff were also left unpaid when the airline suddenly shut down in April 2024.
“We started to hear the whispers and probably could see the writing on the wall, but we kept working hard all the way until the final curtain,” pilot Paul McKeown told national broadcaster ABC News at the time.
Related: Another airline files for bankruptcy, cancels all flights
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