After months of speculation, Comair, the aviation company that runs British Airways in South Africa as well as budget airline Kulula finally went into liquidation, after having failed to raise the funds necessary to keep it in business. At the end of last week, it became apparent that the company couldn’t raise the 500 million rands that would have saved it from going under. In January 2022, business rescue practitioners began sourcing funds from investors and lenders, in order to keep Comair afloat as its solvency issues came to bear in the advent of the coronavirus pandemic in 2020, which surfaced again recently. It was worsened by the Omicron variant of COVID19 which restricted flights from South Africa and the company lost about 100 million rands in “booked but not flown” revenue. The skyrocketing price of fuel around the world following Russia’s invasion of Ukraine has also contributed to the crash of the company. The midweek edition of Business Edge takes a look at the liquidation status of South Africa’s Comair. To discuss with Tolulope Adeleru-Balogun is Phakamile Hlubi-Majola of the National Union of Metalworkers of South Africa.
Listed on the Johannesburg Stock Exchange, Comair was established in 1946 and was once regarded as one of the most profitable airline groups in Africa. believes that the Comair situation is one that was borne out of bad leadership. “We believe that a lot of Comair’s problems are purely down to mismanagement. [It appears to be] the longest business rescue process in history, “Majola says, alluding to the fact that the process has taken longer than the stipulated duration of three months and the practitioner in charge Richard Ferguson has run the airline for two years.
The fate of the employees- some 1200 of them- for now, hangs in the balance. They’re the last line of importance and would be paid last. Majola describes it as a painful situation that will see the workers become worse off in this instance, especially with the high level of unemployment in South Africa.
Watch the first part of Business Edge above and see the concluding part, featuring Derek Nseko, CEO of Airspace Africa below.
