By Alex Mitchell in Sydney

Fledgling budget carrier Bonza has cancelled another week of flights and will not compensate customers left out of pocket as its fleet of planes appears set to be moved offshore.

The embattled airline’s severe financial woes will shortly be aired after its newly appointed administrators faced the Federal Court on Tuesday to ask to hold a creditors’ meeting in just three days.

Nearly 60,000 customers are already in line to become creditors a week after Bonza’s money problems forced the lease agreement on a fleet of Boeing 737-8 planes to be terminated with all scheduled flights cancelled.

The lessors are insisting the planes be returned and they even plan to redeploy the aircraft overseas, the court was told.

Bonza’s administrators, Hall Chadwick, are reviewing every possible option “to allow the resumption of the company’s operations” but have cancelled flights until at least May 15 to buy some more time.

“This is a difficult situation … (the administrators) will continue in their efforts through various discussions with interested parties, potential investors and other airlines,” a company statement read.

“The administrators expect an additional time will be required in order to facilitate and finalise, if possible, these arrangements.”

More than 300 Bonza employees will remain stood down throughout the period.

Hall Chadwick previously said insufficient cashflow and funding had stopped Bonza from operating but added that lessors reclaiming planes, forcing the sudden cancellation of flights, was unexpected.

How, when and where the creditors meeting would be held were all points of contention in court as Justice Elizabeth Cheeseman queried why the session would operate out of Sydney given the airline did not fly from the city.

Barrister James Hutton SC, representing administrators Hall Chadwick, said almost 60,000 passengers could potentially become creditors after many of their bookings were cancelled.

About two-thirds of that number had opened an email outlining the administration process as of Monday morning, he added.

Bonza plans to run a hybrid model allowing 200 people to attend in person and others to watch online.

Creditors will be allowed to propose questions ahead of the meeting if they are attending remotely.

Prime Minister Anthony Albanese said the budget airline’s collapse was another example of the difficult industry and more needed to be done to protect consumer rights.

“What we have seen over a period of time is that the aviation industry is a really tough industry and we have seen a range over recent decades of cheap airlines form, keep going for a little while, and not last,” he said.

Opposition Senator Bridget McKenzie said the government should outline how it would help Bonza workers who were out of a job, as well as the affected customers.

–AAP

When Albo stood up for failing Virgin Airlines

Meanwhile, CityNews aviation writer Scott Mayman writes that PM Albanese has been under fire for not helping to bail out Bonza Airlines, despite four years ago calling on the previous government to intervene when Virgin faced financial problems.