· Comair, the South African carrier, is also in the sick bed,
seeking business rescue at the earliest. Having incurred a pre-tax
loss of R645 million (US$35 million) for the six months to 31
December, the finances of the airline are in dire need of help
· The business rescue process will build on the turnaround
plan. It aims to preserve cash, cut costs, and dispose of
non-performing assets. The business rescue practitioners will work
with the management team and the board towards Comair resuming
operations in accordance with all regulatory requirements
Comair, the South African carrier, is also in the sick bed, seeking
business rescue at the earliest. Having incurred a pre-tax loss of
R645 million (US$35 million) for the six months to 31 December, the
finances of the airline are in dire need of help. A franchise partner
of the British Airways, Comair operates the budget brand Kulula.
The major reason for the bad performance of the airline is South
Africa’s lockdown, which considerably cut down the number of air
passengers. Because of that, the airline has been unable to operate
passenger flights since 26 March. From 5th May onwards, the airline
is under the Joint business rescue practitioners for evolving bailout
strategy. The airline has suspended trading on the Johannesburg stock
exchange with immediate effect. Business rescuers are now engaged in
right-sizing the airline’s operations to be more customer-centric.
www.trendsnafrica.com has been reporting about the airlines, which are
being affected in the wake of Covid-19 and even earlier. South African
Airline (SAA) has now announced that it may liquidate the airline in
case no buyer is coming forward to bailout the debt ridden airlines.
Air Mauritius is also now under the business rescue team because of
the heavy losses incurred over a period of time. South Africa has
announced that once the SAA issues are sorted out, it may start a new
airline under the private-public partnership. Others such as Virgin
Australia and Air Mauritius are in the process of restructuring their
operations.
Comair remains solvent and an important contributor to the South
African economy. The business rescue process will build on the
turnaround plan. It aims to preserve cash, cut costs, and dispose of
non-performing assets. The business rescue practitioners will work
with the management team and the board towards Comair resuming
operations in accordance with all regulatory requirements. The
business rescue practitioners will contact all stakeholders and
suppliers to plan the way ahead in accordance with the processes set
out in the Companies Act.
