Comair liquidation put on hold as negotiations with buyers continue

The ongoing court case involving Comair where it will be determined whether it can be rescued or not has been moved to June next year.

This development has come to the attention of BusinessTech Africa and it will be determined in 2023 whether Comair can be saved or must be liquidated.

Local media reports in South Africa suggest that the case was heard at the South Gauteng High Court in Johannesburg on Tuesday.

Comair, the embattled operator of British Airways and Kulula, according to the office of the company’s provisional liquidators, the Sechaba Trust, a postponement was requested because they are still in negotiations with parties interested in potentially buying certain parts of the company.

The buying of part of the company includes intellectual property like brands and licences per a report by News24.

“The Air Services Licensing Council (ASLC) suspended two air service licences belonging to Comair for two years in August 2022,” said the new portal.

“The various operating licences are the company’s most valuable unsecured assets. News24 Business is aware of at least one local airline which has expressed potential interest in some of the assets.

“Comair’s fleet of aircraft, valued at about R3.5 billion, is encumbered in favour of secured creditors such as banks.”

It is also reported that the ravaging Covid-19 pandemic and related lockdowns negatively affected Comair, which at one point accounted for 40% of South Africa’s domestic market.

The company went into business rescue in May 2020 due to the impact of the Covid-19 travel restrictions. It was also hamstrung by an attempt to cancel a contract to buy Boeing 737 MAX planes. Rising fuel prices after Russia invaded Ukraine added to its woes.

Additionally, at the end of May this year, the beleaguered Comair could not secure further funding necessary to cover operational costs and the business rescue practitioners had to suspend flights and apply for provisional liquidation as a result..

Comair operated its own low-cost airline kulula.com as well as domestic and regional British Airways flights under a licence agreement but the BA agreement was later terminated when Comair was placed in provisional liquidation in June this year.