Government needs to support airlines: experts

Aviation experts say the sector urgently needs government support to prevent more companies from going under after Comair announced that it would go into business rescue.

The company was the latest  in South Africa following the lead of SA Express and South African Airways (SAA) entered into business rescue to safeguard the interests of the company.

The airline says the decision comes as a result of the COVID-19 crisis which has disrupted the implementation of a turnaround plan.

Independent transport economist Dr Joachim Vermooten says, “IATA indicated months ago 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 the government to come to the party and provide financial assistance otherwise the impact will be greatly felt in the country.

 In the video below, unions head to court over the looming retrenchments at SAA:

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Comair reported a half-year loss of  R564 million following the COVID-19 lockdown.

In a statement, Comair Chief Executive Officer says the company faced an unprecedented situation following the lockdown.

Stander 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.

Last week Public Enterprises Department Acting Director-General Kgathatso Tlhakudi says the government was ready to bring in strategic partners for the sale of non-core assets.

He said despite the current delays, they expect the transition from SAA to the new airline to take place soon.

“South Africa is an end of the world destination, her connections are critical for the tourism industry and for investment. The continent has long distances between its economic hubs and this makes air routes for regional integration important. It is for this reason that a capable national carrier is non-negotiable,” said Tlhakudi.

Below is an infographic tacking the airline’s SAA woes: