JSE-listed airline Comair has announced that it will now enter business rescue, while the Johannesburg Stock Exchange has suspended the trading of its shares.
The company, which owns Kulula.com, says entering business rescue will safeguard its interests and those of its stakeholders.
Comair says the COVID-19 crisis disrupted the implementation of its turnaround plan. The company reported a half-year loss of R564 million following the COVID-19 lockdown.
Shaun Collyer and Richard Ferguson have been appointed as the joint business rescue practitioners with effect from 5 May 2020.
In the video below, the Transport Minister and the SA Civil Aviation briefs the media on travel bans:
In a statement, Comair Chief Executive Officer Wrenelle Stander says the company faced an unprecedented situation following the lockdown. Stander says applying for business rescue was the only responsible decision.
He says business rescue practitioners will work with management and the board towards resuming operations in accordance with all regulatory requirements.
Customers with existing bookings will be able to re-book flights within 12 months of their departure date at no charge for changes before 1 November.
Government support needed
Some aviation experts believe no airline will be able to survive the impact of the grounding orders due to COVID-19 without government support.
“Data indicated months ago that no scheduled airline even though well capitalised will be able to sustain the financial impact of the grounding orders applied to airlines. It really required government to come to the party and provide financial assistance otherwise the impact will be greatly felt in the country,” says Independent Transport Economist, Dr Joachim Vermooten.
Below are Level-4 lockdown transport regulations: