South Africa: Comair to cancel 737MAX 8 order
In a recent stock market report published on March 5, the company reports that "certain agreements - in progress - cause significant difficulties for the company, which poses a threat to the future viability of the company." Thus, it gave discharge to the directors in charge of the restructuring, to take “measures necessary to cancel and / or reject, among others […] the purchase contract PA-04055, as revised, between the Company and Boeing with regard to the Boeing 737-8 Max aircraft, concluded in or around September 2013. Johannesburg-based British Airways franchise partner Comair, which operates under the low-cost Kulula.com brand, operates fourteen 737-800s alongside six classic 737s.
The carrier had taken delivery of the first of the eight 737 Max 8 aircraft on order, a week before the crash of the Ethiopian Airlines 737 MAX8 on March 9, 2019. The accident brought the aircraft to a standstill worldwide. and the suspension of deliveries by Boeing. So far, the carrier has contributed $ 45 million in pre-delivery deposits for the MAX order. Former CEO Wrenelle Stander said last year that "continuing uncertainty has prompted Comair to speed up compensation negotiations and explore the legal and financial consequences." Disrupted in its fleet renewal schedule, the company had to "take more expensive short-term options, doubling costs in a number of areas," he explained. These included the extension of the lease of its two 737-400s.
With the cancellation of the 737MAX order, Comair - founded in 1946 and which maintained uninterrupted profitability for 72 years until 2018 - s' commits all the same to remain a 737 operator. This is in any case the will displayed by Wrenelle Stander, before his resignation in November 2020. “We are not considering an Airbus or a mixed fleet at this stage because that we want to standardize and simplify operations,”she said. This is the same position that seems to be taking the new shareholder SA Bidco - a new South African entity that includes former members of the board of directors and executives of Comair - which bought the company last year after. putting it under a rescue plan.
