Despite the easing of restrictions on air travel under lockdown level three, Comair is unlikely to start operating again before November this year.
The company’s business rescue practitioners (BRPs), Shaun Collyer and Richard Ferguson, said the resumption of operations now would require securing fuel suppliers and covering numerous other costs that the airline would not be able to without a significant cash injection.
The BRPs said they were in discussions with funders to recapitalise the airline in order to resume domestic passenger operations by November 1. Over 30 potential funders had been contacted and six of these were progressing, with discussions.
The proposed business rescue plan includes the rationalisation of the current fleet from 27 aircraft, including the grounded Boeing 737 MAX8, to 13 737-800s and three spare 737-400s.
A downsized fleet would be in line with what the company could afford to operate as well as the projected demand for air travel post the Covid-19 crisis, the BRPs said.
Collyer added that employees had been placed on unpaid leave and retrenchment proceedings were continuing under the auspices of the Commission for Conciliation, Mediation and Arbitration (CCMA).
“This unfortunate hardship has been imposed on Comair employees as a consequence of the Covid-19 lockdown and State-of-Disaster Act,” he said.
Comair creditors would be paid according to the probable liquidation dividend determined in accordance with the provisions of the Companies Act through:
• The sale of non-core assets;
• Any equity capital raised and/ or;
• The issuing of shares.
The target date for this is October 31.
The BRPs intend to have “substantially” implemented the plan by March 2021, at which point the company will be handed back to the board of directors and management.