Australian budget airline Bonza collapses, passengers stranded

SYDNEY (Reuters) -Australian budget airline Bonza entered voluntary administration on Tuesday, regulatory filings showed, as the company suspended all flights, stranding passengers amid reports its fleet had been repossessed by creditors.

The collapse comes 15 months after Bonza launched its services with the backing of U.S. investment firm 777 Partners in a market dominated by Qantas and Virgin Australia, which together control about 90% of Australia's airline market.

Documents filed with Australia's corporate regulator showed advisory firm Hall Chadwick was appointed as the administrator for Bonza Aviation Pty Ltd.

Bonza CEO Tim Jordan had said the regional airline had temporarily suspended all services planned for Tuesday while it held discussions about the ongoing viability of its business.

"We apologise to our customers who are impacted by this and we're working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market," Jordan said in a statement.

Leasor AIP Capital had begun to take control of Bonza's four Boeing 737-Max-8 aircraft just after midnight on Tuesday, according to a source, who spoke on condition of anonymity because of the sensitivity of the matter.

AIP Capital has been embroiled in a dispute with 777 Partners, which also owns English football club Everton, media reported. The private equity group is also in a tussle with creditors over planes leased by Canada's Flair Airlines.

AIP Capital and 777 partners did not respond to an after-hours request for comment.

Australian Transport Minister Catherine King said the government's priority would be to ensure stranded Australians reach home safely and quickly. She said both Qantas and Virgin. have offered assistance for stranded passengers.

"We are seeking regular updates from (Bonza) but at this stage, the information we have about what is happening with Bonza is somewhat limited," King told reporters.

Asked whether the company had sought any bailout from the government, King said she was waiting "to hear what the Bonza board is deciding; they are meeting at the moment as to what their next options are."

(Reporting by Lewis Jackson and Renju Jose in Sydney; editing by Lincoln Feast and Gerry Doyle)