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By Sizwe Dlamini 
13h ago
CAPE TOWN: Comair announced that the group would enter the commercial rescue to safeguard the interests of the company and its stakeholders after the Covid-19 crisis interrupted the implementation of a recovery plan.
Global flight activity has declined more than 80 percent year-over-year, according to industry experts, and Comair is just one of several airlines that have been hit hard by the coronavirus pandemic.
Comair reported a loss of R564 million during the first half of 2020, which the company’s CEO, Wrenelle Stander, attributed to an unprecedented situation after the closure of Covid-19.
“Although we had started making good progress in solving the financial situation six months ago, the crisis has meant that we have not been able to implement it as we intended.
“We fully understand and support the government’s reasons for implementing the blockade, however, as a result, we have been unable to operate any flights. Now that the gradual blockade has been extended, the ground connection is likely to last until October or even November. These extraordinary circumstances have completely eroded our revenue base, while we are still required to cover fixed overhead costs. The only responsible decision is to request the trade bailout, “he said in a statement.
Comair, which operates scheduled services on domestic routes as a British Airways franchise, was due to stop flying on March 26 in compliance with South African blocking regulations and has not operated any passenger services since then.
The Covid-19 crisis has also severely affected the global airline industry. A number of carriers have gone bankrupt. Others, such as Virgin Australia and Air Mauritius, have implemented restructuring processes, similar to the trade bailout.
“Comair remains solvent and a major contributor to the South African economy. This is a necessary process to ensure a targeted restructuring of the company as quickly as possible so that we can return to heaven as a sustainable business and play our part in the county airline industry, “said Stander.
The airline appointed Shaun Collyer and Richard Ferguson as joint venture rescue practitioners beginning May 5.
Comair said it was granted approval to suspend trading of its shares at the JSE with immediate effect. Business rescue professionals will provide shareholders and all other interested parties with new updates throughout the process.
The commercial rescue process will be based on the response plan that the Comair administration was already implementing. Its objective is to preserve cash, reduce costs, dispose of non-productive assets and strengthen the balance sheet. The Section 189A process, which was part of this plan and began on March 23, will continue.
Business rescue professionals will work with the management team and the board to help Comair resume operations in accordance with all regulatory requirements, including health protocols to prevent the spread of Covid-19. Stander said Comair will resume operations in accordance with government directives and will continue to collaborate with the government to accelerate the opening of the airline industry.
The airline said that business rescue professionals would contact all interested parties and suppliers to plan the way forward in accordance with the processes established in the Companies Law.
BUSINESS REPORT
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