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Comair announced Tuesday that it cannot operate due to current coronavirus restrictions in place and its board decided that the best option to ensure the company’s long-term survival is to implement a commercial rescue plan.
Shaun Collyer and Richard Ferguson have been appointed as joint venture rescue professionals.
Comair, the owner of kulula.com and the local operator of British Airways, had said in a warning note on April 30 that it only hoped to resume operations in October or November.
The airline has not been operational since March 17 due to coronavirus flight bans.
Under the state’s plans to gradually reopen the economy, restricted air travel will only start at Level 3, full domestic air travel at Level 2, and regional and international air travel at Level 1.
‘Extraordinary circumstances’
Comair CEO Wrenelle Stander said in a statement Tuesday that the company, which reported a loss of R564 million during the first half of 2020, had started making good progress in solving the financial situation six months ago, but the Pandemic has meant it failed to implement what was intended.
“These extraordinary circumstances have completely eroded the company’s revenue base, while it is still required to cover fixed overhead costs. The only responsible decision is to apply for the trade bailout,” Stander said.
Customers with existing reservations may rebook flights within 12 months of their departure date. No charge will be applied for changes made before November 1, 2020.
“Through this process, we intend to adjust the size of 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, increase business digitization and new product development and delivery, “Stander said.
The Solidarity union, which has more than 200 members at Comair, said it is committed to working with the company and other stakeholders in an effort to return Comair “to a champion of the South African skies” and ensure that its members’ jobs are protected.
“Solidarity be aware of Comair’s intentions to continue its downsizing plan under the facilitation of the CCMA [Commission for Conciliation, Mediation and Arbitration]But they will expect designated business professionals to provide a comprehensive business plan to support sustainable change before any job loss, “said Jannem Goussard, organizer of Solidarity for Aviation and Defense.
Special help
Comair, which is listed on the JSE, has been lobbying the state for “special help” through industry initiatives, it said Tuesday. The government, through the Department of Public Enterprises, is currently fighting to secure the future of South African Airways, which has been under commercial rescue since December last year.
Comair said in late April that it had asked staff to take unpaid leave or vacation during the extended shutdown period, as it could not afford to pay employees their full wages.
He announced in late March, just before the national closure and flight bans, that a restructuring process had begun to improve efficiency and financial sustainability. This after the business reported a loss of R564 million during the semester for the six months ending December 2019. Although it reported a 3% growth in revenue, this was not enough to sustain additional costs of 14%, he said. the group previously.
