The South Gauteng High Court in Johannesburg has placed Comair, the parent company of British Airways and Kulula under provisional liquidation, as the airline faces deep financial pressure and is unable to keep up its financial obligations.
Comair cannot afford to for pay aircraft storage, maintenance and insurance costs, so it cannot ensure the preservation of its fleet anymore. The company had previously accounted for some 40% of the domestic aviation market.
Due to pressing financial constraints it was forced to suspend flights at the end of last month, leaving passengers stranded and frustrated.
The liquidation is expected to help Comair to preserve its fleet of aircraft, valued at about R3.5 billion, for the benefit of creditors which include passengers.
Meanwhile, experts are warning of sharp rises in domestic airline ticket prices with another player out of the game. Comair went into business rescue in May 2020 after Covid-19 pandemic era lockdowns, travel bans, as well as rising fuel prices, impacted negatively on the travel industry.
All affected parties have until 26 July to provide the court with reasons why the provisional liquidation order should not be made a final order.
VIDEO: Situation around Comair’s demise and the future of SA airlines industry: Dr. Guy Leitch
Source: SABC News (sabcnews.com)