Comair goes into liquidation
A sad end to one of South Africa's most successful airlines. After 74 years of continuous profitability in its 79-year history, Comair - a British Airways franchise partner operating under the Kulula.com brand - is bowing out, asphyxiated by an odious health crisis that has left no room for respite.
Comair should eventually be wound up. Indeed, on Thursday 9 June 2022, the company's rescue practitioners filed a petition to convert the company's rescue procedure into a liquidation procedure. This option was chosen after they failed to obtain the necessary funds to restart the flights suspended since 31 March.
Put under a rescue plan since 5 May 2020, the South African private airline had relaunched its operations a few months later, thanks to the 500 million rand injected into its coffers by the Comair Rescue Consortium (CRC), to buy 99% of the company's capital.
But later on, the company - which accounts for almost 40% of the domestic market share - was unfortunately confronted with three coronavirus-related blockages, including South Africa being placed on a 'red list' by some European countries, such as the UK, the suspension of its Air Operator's Certificate in March this year, and the steep rise in fuel prices over the past five months.
"Each of these events has had a significant negative impact on its business. CRC has only been able to fund the impact of these effects to a certain extent," laments Richard Ferguson, one of the rescue managers.
Continued requests to CRC to provide a plan to raise the additional funds needed to absorb the balance of these and other potential future economic shocks have not been successful. Even attempts with other lenders proved unsuccessful. This led to the suspension of operations on 31 May 2022.
Comair closed its operations with nearly 2000 employees and an all-Boeing fleet of 22 aircraft (seventeen 737-800s and five 737-400s), 17 of which were owned. Employees and customers of the company who held reservations or claimed refunds will now become creditors of the company, Ferguson said.
In the wake of the announcement, Airlink - the private competitor - announced that it will take over 25,000 tickets already issued by Comair without charge.
