Comair’s business rescue practitioners filed a court application yesterday, June 9th, to convert the company’s rescue process into a liquidation procedure.
Due to financial difficulties, both Comair, a subsidiary of British Airways in South Africa, and its low-cost airline, Kulula, had suspended all operations on May 31th. At that time, the company announced that it would seek a business rescue plan (BRP) to obtain the necessary financing. However, they were unable to do so.
According to Richard Ferguson, one of the lawyers involved in the process, the two brands are “viable businesses” but, despite the efforts to save the company, they were unable to raise the necessary capital to be able to resume services. “We did our utmost to secure the funding, but when we were unable to do so had no option to lodge the application”, he said.
In 2020, Comair had closed the year with severe financial problems. Low demand for air travel, related to the health crisis, forced it to suspend all operations for eight months. A complex shareholder restructuring followed, forcing the company to cancel an order for eight Boeing 737 MAX aircraft.
In March 2022, the company’s situation worsened when the South African Civil Aviation Authority (SACAA) decided to suspend its air operator’s certificate (AOC) after finding several safety issues. The measure also affected Kulula. This was compounded by the fuel price hikes experienced in recent months. Each of these events had a negative impact on the business.
According to the Cirium platform, Comair accounted for 22% of the frequency supply in the South African market at the time of the cessation of operations. Its fleet consisted of three Boeing 737-400s and nineteen Boeing 737-800s. It served five cities in the country.
See also: Citing safety concerns, South African Aviation Authority suspends Comair
