Comair’s business rescue practitioners (BRP) have lodged a court application to liquidate the airline after they failed to raise the funding needed to save it and resume operations, the BRPs confirmed in a statement on Thursday.
The company, which owns and operates domestic carrier kulula.com and has a franchise agreement to operate local British Airways flights, has been around since 1946.
Comair was listed on the JSE for many years and was once regarded as one of SA’s most profitable airline groups. The financial fallout from the Covid-19 pandemic forced it to go into business rescue for the past two years.
Covid-19-related lockdown regulations, which placed suffocating restrictions on air travel, as well as rising operational expenses and the suspension of the airline’s aircraft operating certificate (AOC) by SA aviation authorities earlier this year dealt multiple blows to the airline.
“We did our utmost to secure the funding, but when we were unable to do so, had no option to [but] lodge the application. It is an extremely sad day for the company, its employees, its customers and South African aviation,” says BRP Richard Ferguson.
Despite being in business rescue, Comair was able to remain operational with the help of the Comair Rescue Consortium (CRC) which invested R500 million in the business for a 99% equity share.
However, the cash-strapped airline hit the skids again late last month when it suddenly suspended all its flights. This shocked customers who just hours before the announcement were purchasing flight tickets at discounted prices.
Although there is still no certainty about what will happen to Comair employees during this process, the BRPs have noted that all company employees and customers – who held bookings or were owed refunds – will become creditors of the company to be considered when liquidation proceedings begin.