British Airways’ franchise partner in Southern Africa, Comair, plans to resume flights from December 2020.
Comair has been in a business rescue process since early May. It had been required to suspend flight operations on 26 March due to lockdown in South Africa. The airline had also been suffering due to high debt levels, the grounding of the Boeing 737 MAX and non-payment of compensation by South African Airways.
Under a Business Rescue Plan published yesterday, Wednesday 2 September, the airline will be recapitalised. It will receive a financial injection of R500 million by a new investor in return for a 99% shareholding in the airline.
Comair will also require additional funding from lenders of R1.4 billion. This will comprise R600 million of new debt. Comair’s existing debts will be deferred to provide the remaining R800 million, with repayments deferred for 12 months and interest deferred for 6 months.
It is intended that Comair maintain its dual brand structure, operating as British Airways under a franchise and as Kulula. According to the list of creditors BA was owed R50,998,152 (~£2.2m) by Comair. As a consequence of the Business Rescue process, BA’s shareholding will be wiped out.
Comair aims to resume flight operations from December 2020 with a view to operating a full flight schedule by June 2021.
It is expected that Comair’s fleet will initially comprise 20 aircraft of which 17 will be Boeing 737-800 aircraft and the remaining 3 will be Boeing 737-400 aircraft. This may ultimately increase to 25 aircraft and compares to a fleet of 27 aircraft before Comair suspended operations.
The Business Rescue Plan is subject to a vote by creditors and shareholders which will close on Friday 18 September.
Originally founded in 1946, Comair became a BA franchise in 1996.
Prior to the suspension of flights, it operated routes to destinations in South Africa, Mauritius, Namibia, Zambia and Zimbabwe from its main hub at Johannesburg. It also operated the airline brand Kulula and SLOW lounges in Africa.
Update Friday 18 September
Creditors have voted in favour of the business rescue plan as per a statement from Comair.