South Africa’s oldest private airline in liquidation after it fails to get funds

PUBLISHED: Thu, 09 Jun 2022 13:56:07 GMT
Promit Mukherjee
Reuters
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Cape Town International Airport South Africa a Boeing jet of the low cost airline Kulula fleet on the taxiway. (Photo by: Education Images/Universal Images Group via Getty Images)

JOHANNESBURG, June 9 (Reuters) – South Africa’s oldest private airline Comair will stop operations permanently after its bankruptcy protection lawyers on Thursday filed an application to liquidate the company which had failed to secure funding to stay airborne after being impacted severely by global pandemic-related travel restrictions.

The end of the company, whose neon green aircraft under the low-cost kulula.com carrier had dotted tarmacs across the country’s airports, comes after two years of interventions by bankruptcy protection lawyers, investors and employees to save the 75-year old airline.

The carrier, which also ran the British Airways franchise in South Africa, started operations in 1948 as a chartered service between Johannesburg and Durban, and later ferried Anglo American’s employees between gold mines. It entered commercial service in 1992.

“We did our utmost to secure the funding, but when we were unable to do so had no option to lodge the application,” Richard Ferguson, the company’s business rescue practitioner, a category of lawyer hired as administrators to save a company from liquidation, said in a statement.

Read more: South Africa’s Comair suspends flights until funding secured

“It is an extremely sad day for the company, its employees, its customers and South African aviation.”

Comair, along with the national carrier South African Airways, were the two hardest hit domestic airlines after the COVID-19 pandemic forced countries to seal international borders.

In November 2020, its former board members and executives agreed to pump in 500 million rand ($32.78 million) of equity as part of a rescue plan.

However, South Africa’s ‘red listing’ by foreign nations due to the Omicron variant of the coronavirus, the suspension of its flights in March due to safety reasons and rising crude prices meant a more immediate infusion of funds to keep it flying, its administrator said.

Comair’s employees and customers who held bookings or were owed refunds will now become creditors of the company, its administrator said.

($1 = 15.2538 rand)

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