Bonza has 57,000 customer creditors, aircraft still grounded

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.

EARLIER: Collapsed airline Bonza has more than 57,000 customer creditors, most of whom have forward bookings with the company.

A barrister acting for the airline's administrators told the Federal Court on Tuesday morning that the company also had 323 employee creditors and 120 trade creditors.

The court is weighing up whether to allow a first meeting of creditors to proceed on Friday or delay the gathering to give creditors more time to organise proxy representatives.

Barrister James Hutton told the court that the administrators, Hall Chadwick, had estimated 20,000 or more people could attend a virtual meeting of creditors.

The administrators are seeking court orders relating to how creditors' virtual meetings will proceed, including how creditors can ask questions.

Mr Hutton said the administrators were treating customers with forward bookings as "contingent creditors" given it was still uncertain if their flights would be cancelled.

Mr Hutton confirmed creditors of the company had seized planes leased to Bonza and the lessor had "expressed their clear intention" to remove the aircraft from Australia.

Bonza went into voluntary administration on April 30 after its US parent company, 777 Partners, lost control of its leased planes.

Mr Hutton said the lessor had "rightly enforced" the lease termination 90 minutes before Bonza went into administration.

Hall Chadwick said last week that it had been in talks with "key industry participants within Australia and overseas with regard to the current status and a way forward for the company and its operations".

"The largest consideration for these parties is the current status of the aircraft, which currently remains grounded," Hall Chadwick said in a public statement.

"During this time, whilst the aircraft remain grounded and there is insufficient cash flow and funding, the administrators are unable to recommence full operations.

"The administrators also have no alternative but to stand down the majority of the employees of the company, pending the outcome of these above ongoing discussions.

"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 it could not reveal Bonza's financial position because "this information remains commercially sensitive and subject to ongoing investigation".

The administrators also confirmed that it could not process nor issue refunds to customers "at this time".

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 told ABC Radio.

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.

She also called for an investigation into Bonza's financial backers 777 Partners, who also own the majority share of A-Leagues club Melbourne Victory.