(Adds more information about 777 Partners and statement from...

(Adds more information about 777 Partners and statement from transport minister, paragraphs 6-9)

SYDNEY, April 30 (Reuters) - Australian low-cost airline Bonza suspended flights on Tuesday and was assessing the viability of its business as several newspapers reported its fleet of planes had been repossessed by creditors.

Bonza CEO Tim Jordan 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," he said in a statement.

The airline's fleet of Boeing 737-Max-8 aircraft had been repossessed by creditors, according to reports in The Guardian and The Australian Financial Review.

An airline spokesperson did not respond to questions about the repossession.

The potential collapse comes only 15 months after Bonza first launched passenger air services with the backing of U.S. investment firm 777 Partners.

The private equity group is embroiled in a separate dispute with creditors over planes leased by Canadian budget carrier Flair Airlines. It did not respond to an after-hours request for comment.

Australian Transport Minister Catherine King said she was aware of reports that Bonza flights had been cancelled and her department was establishing a hotline for stranded passengers.

"My department has reached out to Bonza and our expectation is that they keep passengers informed of their options and their consumer rights," she said in a statement.

Australia's airline market is dominated by Qantas Airways (QAN) , its subsidiary Jetstar and Virgin Australia, which together control just over 90% of the market, according to the competition regulator.