Budget carrier Bonza has been permanently grounded after creditors voted to liquidate the embattled airline with staff still owed millions of dollars.
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Creditors decided to wind up the airline at a meeting on Tuesday with administrators Hall Chadwick, after failing to secure a buyer.
"The administrators ran an extensive sales campaign involving numerous investors, other airlines and companies from the travel industry," a Hall Chadwick spokesman said in a statement.
"Unfortunately, the administrators had not received any offers for the sale of the company business and/or assets at the conclusion of the campaign."
Bonza launched in early 2023 as a low-cost competitor to major players Qantas and Virgin, but collapsed 18 months later.
The carrier's employees have been stood down without pay since April after it went into administration and lessors repossessed its six Boeing 727 Max 8 planes.
At the time it was estimated Bonza owed more than $110 million to creditors, landlords, staff and the tax office.
More than 300 staff were collectively owed about $10.8 million in entitlements such as wages and redundancy payments, but had been unable to claim through the federal government's fair entitlements guarantee scheme until liquidation occurred, the Transport Workers Union said.
"The finality of Bonza's collapse is a sad event for Australia's aviation industry, but brings the certainty workers needed to access the fair entitlements guarantee scheme for their owed entitlements, including wages for work completed in April," union national secretary Michael Kaine said in a statement.
US-based major creditor 777 Partners has been contacted for comment.
The union says Bonza's collapse is a hit to the regions, which have lost access to 35 lower cost routes, 30 of which are not serviced by industry heavyweights Qantas, its subsidiary Jetstar and Virgin.
"The worst of this news is the hopelessness of reconnecting regional Australia without intervention from a regulatory body," Mr Kaine said.
The union is calling for a new commission to oversee stability, competition and standards within the aviation industry.
"While aggressive market competition dominates the most lucrative routes, regional communities are left high and dry."
Qantas, its subsidiary Jetstar and Virgin account for almost 95 per cent of domestic passengers nationally.
Hall Chadwick's Richard Albarran, Kathleen Vouris, Brent Kijurina and Cameron Shaw have been appointed as Bonza's liquidators.
They will continue their investigation into the carrier's business and report findings to the Australian Securities and Investment Commission, before considering future action and potential claims for the benefit of creditors.
Australian Associated Press
