Comair, the owner of budget airline Kulula has become the first listed company to buckle under the weight of COVID-19 after the airline announced it will enter business rescue.
The company, which also operates local flights for British Airways, said the decision was to protect the interests of the company and its stakeholders after the COVID-19 crisis “disrupted the implementation of a turnaround plan.”
Comair CEO, Wrenelle Stander, said, while the company had started making good progress to fix its constrained financial situation six months ago, the COVID-19 pandemic has meant it would not be able to implement its plans as it intended.
“We completely understand and support the government’s reasons for implementing the lockdown, however, as a result, we have not been able to operate any flights. Now that the phased lockdown has been extended the grounding is likely to endure until October or even November,” Stander said.
“Comair remains solvent and an important contributor to the South African economy. This is a necessary process to ensure a focussed restructuring of the company takes place as quickly as possible so we can take to the skies again as a sustainable business and play our part in the county’s airline industry.”
The company has also suspended the trading of its shares on the JSE.
The airline industry has been one of the hardest-hit sectors as governments across the world enforced travel restrictions in an effort to curb the spread of the virus which has already infected more than 3,5 million people and claimed more than 250,000 lives.
Comair, in February, reported a half-year loss of R564 million its interim results for the six months ended on 31 December 2020.
