South African airline Comair has entered into business rescue, in a move which it says aims to “restructure the airline as a sustainable business”.
Comair operates as a British Airways franchise carrier on South African domestic services, as well as offering flights under its own low-cost Kulula brand.
It has not operated any flights since March 17, and last week the airline said that it did not anticipate resuming services before October at the earliest.
Comair’s CEO Wrenelle Stander said that the voluntary rescue process – a South African process similar to bankruptcy protection – was “a necessary process to ensure a focussed restructuring of the company takes place as quickly as possible so we can take to the skies again as a sustainable business and play our part in the county’s airline industry”.
The news follows Virgin Australia and Air Mauritius going into voluntary administration in the last month, as the aviation industry faces an unprecedented downturn as a result of the coronavirus crisis.
“We completely understand and support the government’s reasons for implementing the lockdown, however as a result we have not been able to operate any flights,” said Stander.
“Now that the phased lockdown has been extended the grounding is likely to endure until October or even November. These extraordinary circumstances have completely eroded our revenue base while we are still obliged to meet fixed overhead costs. The only responsible decision is to apply for business rescue.”
Comair had taken delivery of the first of eight B737 Max 8 aircraft in February 2019, shortly before all Max aircraft were grounded worldwide , but last week said it was in discussions with Boeing regarding the cancellation of its Max order.
Stander said that through the business rescue process the carrier intends to “right-size our operations to be more efficient, agile and customer-centric”.
“This includes, but is not limited to, reconfiguring our network and fleet mix, reviewing portfolios and joint ventures, increased digitisation of the business and new product development and delivery.
“We are confident that with the work we’ve already done and the support of our stakeholders we will get through this process and will be a more sustainable business, better positioned to continue serving the flying public and contributing to the South African economy.”
