Comair, the company which owns and operates Kulula and British Airways locally, has announced that its business rescue plan has been adopted by a vote of creditors and shareholders.
The plan will see the investment of R500 million of fresh equity in a 99% shareholding by the preferred investment consortium, which comprises a number of former Comair board members and executives.
“Up to 15% of this will be allocated to a suitable BBBEEE partner within 12 months.”
As part of the plan, Comair will de-list from the JSE and a new board will be constituted.
“The turnaround plan will focus on reducing operating costs and growing ancillary revenue,” Comair said.
“This will see the current workforce reduced from about 2,200 employees to 1,800 through voluntary retrenchment and early retirement programmes, as well as the Section 189 retrenchment process that began prior to business rescue continuing.”
Return to service
It is intended that the fleet be restored to 25 aircraft, including two Boeing Max aircraft.
The company said the aircraft will gradually return to service from December with a seven-month ramp-up period until June 2021.
Existing relationships will be maintained with British Airways, Discovery Vitality, Slow Lounges, and Boeing, it added.
Comair CEO, Wrenelle Stander, welcomed the adoption of the business rescue plan, stating that entering business rescue had been a difficult decision, particularly as good progress was being made to fix the financial situation.
However, the extraordinary circumstances of the lockdown meant the company was unable to earn any revenue.
“When the lockdown happened, business rescue became the only responsible course of action. Had we not made that tough decision Comair would not have flown again,” Stander said.
“There may still be a few bumps on the way ahead, however, now that the plan is adopted, at last clearer skies are now in sight.”
Comair said that should everything go according to plan, the business rescue process should be concluded by 31 March 2021, after which Comair will continue to operate as a sustainable business.