One of South Africa's longest-standing airlines is set to be no more, as Comair has filed for liquidation after being unable to secure the necessary funding to continue with its operations.
The company's Business Rescue Practitioners (BRPs) lodged a court application on Thursday, 9 June to convert the business rescue proceedings into liquidation proceedings.
Comair accounts for 40% of domestic lift in South Africa and customers who have bookings or are owed refunds will now become creditors of the company.
Comair entered into voluntary business rescue proceedings on 5 May 2020. The company was then able to start flying again when the Comair Rescue Consortium (CRC) invested R500m for a 99% share of the equity in the company at the time.
Comair's flight operations were abruptly suspended on 31 May 2022, after its existing funding ran out and efforts to secure additional funds were also exhausted.
It's BRPs continued the process to secure additional funding from other sources but despite several parties expressing interest, they were unable to secure the necessary financial commitment.
The airline has unfortunately been hard hit by the lockdown and travel restrictions of the Covid-19 Pandemic. It suffered a further blow after being grounded due to safety concerns in March 2022.
One of the BRPs, Richard Ferguson says with its two airline brands – British Airways (operated by Comair and kulula.com), market share, modern aircraft fleet, experienced employees, sales and distributions channels Comair was an inherently viable business.
“We did our utmost to secure the funding, but when we were unable to do so had no option to lodge the application. It is an extremely sad day for the company, its employees, its customers and South African aviation.”
Comair Grounding 01 June 2022
Thousands of travellers were stranded as Comair abruptly suspended all its kulula.com flights and the British Airways flights, it operates under a license agreement.
This comes less than three months after Comair was grounded due to safety concerns.
The flights, suspended on Tuesday evening, are pending Comair successfully securing additional funding. Ticket sales have stopped with immediate effect.
Comair accounts for 40% of domestic lift in South Africa.
This grounding does not bode well for South African travellers, especially ahead of the peak school holiday period at the end of June or those looking to plan a weekend getaway at one of the many popular bush getaways or beach break destinations around the country. International holidaymakers are also preparing to spend their summer holidays in South Africa at this time.
Flight ticket price increases, especially as demand increases, was a concern raised by the Competition Commission when Comair was previously grounded in March 2022.
Minister of Tourism Lindiwe Sisulu expressed concern about the grounding, noting that domestic travel kept the tourism sector afloat during the COVID-19 period, "driven by specific campaigns and pricing geared towards the domestic market".
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Sisulu says following the impact of Covid, there is a better understanding of what the local traveller needs and the market has been propelled to "diversify its offerings", especially when it comes to affordability.
This, together with accessibility remain key factors as hefty fuel price increases burn into the cost of living for most locals.
Secret Getaway Co-Founder Andrea Britt says there needs to be more of a mandate to aid the recovery of the tourism sector, but most importantly to help South Africans travel more locally, especially in light of this grounding and the petrol price going up.
Comair's business rescue practitioners have advised that the process to raise the necessary capital is in progress and the airline is doing what it can to secure the required funding.
"Once received, the airline will be able to recommence operations."
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