Comair, the owner of Kulula and operators of British Airways in South Africa has suspended all flights as the company’s efforts to raise additional money failed and is now unable to fund its flight operations. According to a statement released by the company, all operations have been put on hold as the company until it is able to secure more funding.
Comair had previously been in business rescue during the COVID19 crisis of 2020 but was able to acquire a funding package at the time. However, its need for capital has returned as the aviation industry restarted operations. The current halt could reduce airline capacity in South Africa by as much as 40%.
Nevertheless, Comair believes that despite the ongoing financial crisis it’s facing, it is still a viable business that could generate 3.5 billion rands once it’s back in the air with its fleet of 26 Boeing aircraft.
A group of investors – including former Comair directors, have already injected 500 million rands into the company to take over its ownership and fund its business rescue process while a further R1.4 billion had been secured from commercial banks before missing the May 31 deadline set to convince lenders to waive payments on obligations.
In March, South Africa’s regulatory body, the South African Civil Aviation Authority (SACAA) suspended Comair for safety reasons but soon re-approved it for flights. That same March, members of the N Union of Metalworkers of South Africa staged a protest at the company’s offices to demand that CEO Glenn Orsmond be fired amidst claims that Comair’s reputation of putting profits before people will damage the company further.
