Many South Africans will have to dig deeper for local flights following the demise of Comair which filed for liquidation last week, the Bureau for Economic Research (BER) said on Monday.
Comair operated scheduled services on domestic routes as a British Airways franchisee. It also operated as a low-cost carrier under its own kulula.com brand and was reliable for the 40% of domestic airline capacity.
Comair’s business rescue practitioners said on Thursday last week that the airline could not successfully secure funding to pull it out of the financial quagmire.
The BER, which facilitates cutting-edge investigation and analysis of major economic issues, said the immediate impact of Comair’s failure would be the unfortunate loss of jobs. The airline employed more than 1 000 people.
“Furthermore, at least in the near term, air ticket prices are likely to spike. As seen with the reduced routes being flown by South African Airways, over time, other operators will fill the gap left by Comair,” said the BER, noting that in the short term, higher ticket prices will add to domestic inflationary pressures.
It has also been revealed that the loss of Comair could lead to ticket price increases of as much as 300% to 400%.
Comair entered into voluntary business rescue proceedings during the peak of Covid-19 and hard lockdown on May 5 2020 in order to safeguard the company and its stakeholders.
The airline said at the time that the move would ensure a focused restructuring of the company as quickly as possible so it could operate as a sustainable business and play its part in the country’s airline industry and economy.
Feel for all those losing their jobs 💥 #comair
— Karin Morrow (@rinmor) June 9, 2022
Lmao I hope you guys were not expecting refunds from Comair?
— Phume (@phume22) June 9, 2022
With Comair going bust South Africa just lost close to 40% of its domestic airline capacity. Its bigger than just a single airline, this in industry in trouble. Tourism will suffer as well. Sad. To think 5.8 million people flew on their planes in 2018……
— Marius Croucamp (@croucampm) June 9, 2022
Also read:
Comair fails to secure funding, files for liquidation
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