South African airline Comair enters business rescue

Comair, which operates the British Airways franchise in South Africa and owns budget airline Kulula, is the first local airline to file for business rescue as a result of the coronavirus.

It joins embattled state-owned South African Airways (SAA), which filed in December, while state-owned SA Express was placed under “provisional liquidation” on Tuesday by a court after the airline’s administrators said rescue efforts that began in February weren’t likely to succeed.

Comair Chief Executive Wrenelle Stander, said the firm, which reported a half-year loss of 564 million rand ($30.73 million) in February, faced an unprecedented situation following the five-week-long coronavirus lockdown, which was partially lifted from May 1.

Stander said the only responsible decision in response to the travel restrictions is to apply for bankruptcy protection.

“Now that the phased lockdown has been extended, the grounding is likely to endure until October or even November. These extraordinary circumstances have completely eroded our revenue base while we are still obliged to meet fixed overhead costs,” he said in a statement.

The airline was granted approval to suspend the trading of its shares on the Johannesburg Stock Exchange with immediate effect.

Reporting by Nqobile Dludla; Editing by Olivia Kumwenda-Mtambo and Jonathan Oatis

In Stander's statement, he said the lockdown has been extended and the grounding will possibly last into Oct. How accurate is that?