Budget airline Bonza has fallen into voluntary administration after passengers were left scrambling to find seats on planes following sudden cancellations.
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Travellers were left stranded in airports across Australia on Tuesday morning amid urgent talks about the future of the airline.
ASIC records on Tuesday afternoon showed the company appointed external administrators, named as Hall Chadwick.
In a brief statement earlier, chief executive Tim Jordan apologised to customers and said the company's ongoing viability was being discussed.
"We're working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market," Mr Jordan said.
Flights suspended on Tuesday included those to or from Melbourne, the Sunshine Coast, the Gold Coast, Launceston, Alice Springs and others.
Federal Transport Minister Catherine King said a hotline for stranded passengers was created.
"My department has reached out to Bonza and our expectation is that they keep passengers informed of their options and their consumer rights," Ms King said.
Virgin Australia, Qantas and Jetstar have offered to fly Bonza passengers free of charge to airports closest to their destination.
Jamie Taylor, her husband and three young children found out their flight from the Gold Coast to Launceston was cancelled once they had reached the gate on Tuesday morning.
She said the family of five has since spent more than $3000 to find a new way home.
They drove a hire car down to Brisbane to catch a new flight to Sydney, where they will stay in a hotel for a night before finally flying back home on Wednesday.
"I've been in tears a couple of times," Ms Taylor told AAP.
"My kids are missing an extra day of school than we planned."
Passenger Glenn Stacey left his accommodation at 4.30am to catch a flight from Launceston to the Gold Coast and had just two hours' notice his journey would be cancelled because of "operational requirements".
He was meant to work on Tuesday afternoon but will not make his shift because the only flight he could secure is scheduled to leave at 5.30pm and cost him $500.
"I've now got to sit around at the airport all day," Mr Stacey said.
The Sunshine Coast-based company was unveiled in October 2021 and its first flight took off in January 2023.
It operates Boeing 737-Max-8 planes and is backed by 777 Partners, an investment group based in Miami, Florida.
It originally flew 27 routes to 17 destinations but started cutting services during its first six months.
Earlier in April, the Australian Financial Review newspaper reported advisory firm KordaMentha had been called in to help the company, which Bonza denied.
Bonza's LinkedIn profile states it has between 51 to 200 employees.
The airline operates flights from select airports on Australia's east coast but does not have flights to or from Sydney and Brisbane.
It flies to many regional destinations including Albury, Mildura, Mount Isa, Tamworth and Port Macquarie.
The Transport Workers Union said Bonza's uncertain future pointed to a "broader issue of instability in aviation" and repeated calls for greater regulation of the industry.
National secretary Michael Kaine said it was an extremely distressing time for passengers and workers.
"Bonza must ensure staff are prioritised and informed as this process plays out," he said.
AAP has contacted 777 Partners and Hall Chadwick.
Australian Associated Press
