Budget airline Bonza continued to sell tickets for almost two weeks despite receiving default notices it would be forced to ground its planes.
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Thousands of passengers were left stranded around Australia when Bonza flights were cancelled on Tuesday morning with little notice.
Administrator Hall Chadwick revealed default notices were issued to the airline on April 17, almost two weeks before customers were left scrambling to secure alternative flights.
Bonza leased its entire fleet of Boeing 737-8 planes and those lease agreements were terminated late on Monday night.
Bonza's directors claimed action taken by lessors that forced them to ground flights was "not foreshadowed or expected", Hall Chadwick said in a statement.
The administrator said insufficient cashflow and funding was preventing Bonza from continuing to operate.
All planes have been grounded until at least Wednesday, May 8, five more days than previously expected.
Most of Bonza's 150 staff have been stood down and passengers with upcoming flights have been told not to travel to an airport unless they have secured a seat with a different airline.
"The administrators appreciate this is not the news that the employees, customers, and other key stakeholders would like to hear however, there is no alternative course of action available to the administrators at this point in time," Hall Chadwick said.
Refunds are not being processed and customers have been told to contact their bank or travel insurance provider.
The Sunshine Coast-based company was unveiled in October 2021 and its first flight took off in January 2023.
It originally flew 27 routes to 17 destinations but started cutting services during its first six months.
Bonza has flown to a host of regional destinations including Albury, Mildura, Mount Isa, Tamworth and Port Macquarie.
