Fasten your seatbelts, Bonza fields inbound interest

afr.com:

The private equity interests behind Bonza, the latest to try its hand at breaking into the ultra-competitive Australian aviation market, are considering whether to bring in new capital partners to back the airline’s expansion into a full-scale domestic carrier.

Street Talk can reveal Miami-based private investment firm 777 Partners – which does its M&A work in-house but will seek external counsel when required – has been in discussions with local advisory firms as it seeks assistance with inbound interest in the airline. It owns the vast majority of the company – with Bonza chief executive Tim Jordan having a small interest – and it is not clear whether it would sell down its holding.

Bonza CEO Tim Jordan disembarks the airline’s first flight earlier this year. 

In its discussions, sources told Street Talk, 777 is eyeing a $100 million valuation on Bonza, which launched only this year. While no decisions have been made, it is in the preliminary stages of reviewing other potential sources of capital that would serve to turbocharge its growth strategy.

The private equity firm has plenty of other investments around the world, including a stake in Canadian budget airline Flair and in A-League team Melbourne Victory.

Last week, Bonza said it was cutting five routes from its schedule as it waits for planes that are operating during the northern hemisphere summer to arrive in Australia later this year. The carrier began flying at the end of January from bases in Melbourne and the Sunshine Coast, and has since boosted the local low-cost carrier industry from 60 routes to 80 routes.

However, it is scrapping flights from the Sunshine Coast to Coffs Harbour, Port Macquarie and Tamworth, as well as the Cairns to Mackay and Toowoomba