The franchise owner of British Airways within South Africa is likely to be liquidated after failing to secure new funds to keep the business afloat. Comair, which operates British Airways and Kulua branded flights in South Africa was forced to suspend operations on May 31 after running out of money but was confident was raising additional equity.
On Thursday, a court application was made to turn so-called business rescue proceedings into a formal liquidation process.
Comair entered a process known as Business Rescue in May 2020 after the pandemic decimated its business and the airline’s finances ran dry. So-called ‘Business rescue practitioners’ were appointed to oversee a reorganization and the airline restarted operations in December 2021.
The airline’s appointed Business Rescue Practitioners said in a statement on Thursday that they “no longer believe that there is a reasonable prospect that the Company can be rescued.”
The statement continued: “Regrettably, the requisite funding could not be raised in order for the Company to continue with its operations.”
Comair initially ran into financial difficulty with a disastrous order for eight Boeing 737MAX aircraft. The airline had paid out millions of dollars in deposits for the aircraft and had already taken delivery of one MAX jet when the model was grounded worldwide over safety fears.
The airline is still pursuing compensation from Boeing in the U.S. courts.
More recently, Comair was ordered to temporarily ground its entire fleet over maintenance safety fears. Rising fuel costs and have added to the carrier’s woes in recent weeks.
Last month, Comair chief executive Glenn Orsmond insisted that the airline was “inherently a viable business” and attempted to reassure passengers that investors would soon come to the rescue.
Sad. Comair has been around for decades and at times made it successfully against the odds of SAA back in a time when SAA with the support of the government (1970s, 80s) stood for no competition.