South African airline Comair placed under business rescue plan
Embattled South African airline Comair on Tuesday announced it had entered a voluntary bankruptcy protection process — as the COVID-19 suspension of commercial flights sends the carrier plunging further.
Comair, which operates the British Airways franchise in South Africa and the low-cost Kulula said the move would “safeguard the interests of the company”, noting in a statement that the “grounding is likely to endure until October or even November.”
The carrier was already under financial strain before being forced to stop flying on 26 March, reporting a half-year loss of 564 million rands ($30.7 million) for the first half of 2020.
“These extraordinary circumstances have completely eroded our revenue base while we are still obliged to meet fixed overhead costs,” said Comair Chief Executive Wrenelle Stander.
“The only responsible decision is to apply for business rescue.”
The airline was also granted approval to suspend the trading of its shares on the Johannesburg Stock Exchange with immediate effect.
Comair joins the embattled state-owned South African Airways (SAA) which was placed under a state-approved business rescue plan in December as a last-ditch resort to save the company from total collapse.
Customers who purchased Comair tickets will be able to change their reservations within twelve months of their original departure date.