Comair, South Africa’s oldest airline, has reached the end of the road after a recent statement from its business rescue practitioners stated that they do not see a reasonable way in which the airline can be rescued from its financial predicament.
As a result, current business rescue proceedings are being converted into liquidation proceedings.
Calling it a day
Last week, as reported by Travel Radar, Comair announced the grounding of all of its aircraft as it awaited funding from elsewhere. The carrier was highly optimistic and believed that all important funding will be obtained sooner rather than later and operations will be able to resume as normal.
Yet in a statement issued yesterday, the business rescue practitioners working with Comair revealed that the South African airline had not successfully received this funding:
“The company’s joint business rescue practitioners give notice herewith that they no longer believe that there is a reasonable prospect that the company can be rescued.”
What seemed to be a temporary bust has become a very permanent one. Comair has applied in court to covert the ongoing proceedings to liquidation proceedings, meaning that it is very unlikely the airline will return to the skies as a fully functioning commercial carrier.
Comair’s subsidiary kulula.com will also permanently seize operations. The carrier shared on social media that it will be refunding customers who booked travel during its end of May sale.
Customers who confirmed travel on the 31 May 2022 sale, have been refunded. If funds have not reflected in your account within seven working days, please contact your issuing bank to enquire.
— kulula (@kulula) June 9, 2022
What does this mean for customers?
British Airways passengers that booked with Comair between June 7 – 12th will be able to rebook for free with South African airline Airlink.
A British Airways spokesperson, in a statement to Simple Flying, offered more detail on how Comair’s liquidation will affect its customers:
“We’re contacting customers due to fly with Comair to offer them rebook and refund options, including flights on other carriers where possible. British Airways services between London and South Africa continue to operate as normal and we’ll continue to provide support and assistance to our franchise partner and their colleagues at this difficult time.”
Unfortunately for Comair passengers, refunds seem to be unlikely. When announcing its current situation, the carrier revealed that employees and customers of the airline who held bookings or were owed refunds are now considered creditors of the company. This means it has become significantly more difficult for them to get their money back.
What does this mean for South African aviation?
Combined, Comair – a British Airways franchisee – and kulula.com was South Africa’s second-largest airline operator. Kulula.com was a purely domestic carrier serving South Africa exclusively. Comair only operated three international routes and was essentially focused on domestic service. Therefore, it is somewhat obvious the significant extent of the impact their exit will have on South African domestic aviation.
Cirium provides data and aviation analytics solutions to various sectors. Cirium data shows that the loss of Comair and kulula.com means that 19,000 flights will not take place between June – December of this year. This reduces South Africa’s total planned domestic flights down to 60,000 from the initial 79,000.
Not all hope is lost as it is likely competitors will fill up the gap sufficiently enough, but the amount of domestic seats available will drop. It’s not a case of how much is available but how many people will be able to fly at a time.
As Comair and kulula.com’s large narrowbodies will be missing from the skies for now and in the future, a third of the total capacity of domestic seats will go.
South Africa’s Tourism Minister Lindiwe Sisulu expressed regret at Comair’s decision to liquidate.
Reflecting upon the fact that Comair flights accounted for 40% of the country’s aviation market and that 1,200 of the airline’s employees have been forced into unemployed, Sisulu hopes that Comair shutting up shop does not cause other airlines to respond by raising its prices.
Are you surprised to hear that Comair has decided to enter liquidation? Why? Let us know in the comments below.
