Business Times reports that the Covid-19 pandemic, soaring fuel prices, an ambitious relaunch and a grounding due to safety management issues in March led to Comair being left with no option last week but to apply for liquidation, putting 1,200 jobs at risk.
Comair, which operates British Airways in SA and Kulula.com, was dealt a blow on Thursday when joint business rescue practitioners (BRPs) Richard Ferguson and Neil Hablutzel said there was no “reasonable prospect” of it being saved. They advised that they had lodged a court application on Thursday to convert the business rescue proceedings into liquidation proceedings. The news came little more than a week after Comair cancelled all flights due to funding difficulties. In March, the operator was grounded for five days by the SA Civil Aviation Authority over safety management system issues. Comair, which had gone into business rescue during lockdown in May 2020, had relaunched its operations in December. Aviation economist Joachim Vermooten said the pandemic had been a major blow for the airline, with a “very soft market and business travel at low levels” as a result of online conferencing. Prior to restarting operations, the business rescue plan had assumed the aviation market would return to pre-Covid levels by the middle of 2022, but “based on actual numbers the forecast was revised to the market remaining at only 65% of pre-Covid levels, which informed the fleet size”, it said. Phakamile Hlubi-Majola, spokesperson for the National Union of Metalworkers of SA (Numsa), said the union, which represented 700 of Comair's staff, was “deeply concerned” and liquidation was the “worst case scenario”. Numsa "knew salaries were not going to be paid in June, but with the liquidation there was even more uncertainty whether staff would be paid because different rules apply in this process".
- Read the full original of the report in the above regard by Nick Wilson at Business Times (subscriber access only)
Get other news reports at the SA Labour News home page