• Market Watch

British Airways looking for new SA partner

- 2022-08-02 00:00:00

Carin Smith - British Airways has cancelled its franchise agreement with Comair.
The agreement had a cancellation trigger brought about by the provisional liquidation of Comair, provisional liquidator Cloete Murray confirmed yesterday.
"It is my understanding that BA is now looking for a new partner in the South African market," said Murray.
London-based British Airways told Fin24 in the past that it is not able to comment on franchise agreements as it involves commercially sensitive information.
Comair operated its own low-cost airline, kulula.com, and domestic and regional British Airways flights as part of the franchise agreement. Comair accounted for some 40% of the domestic aviation market.
The franchise agreement did not form part of the assets of Comair. Comair used its own planes to operate its BA flights. These planes would have to be repainted if they are used for another purpose.
LETTERS OF INTEREST
Fin24 reported last week that the provisional liquidators received 21 letters of interest from parties who either want to buy the company as a going concern, or buy its assets. The names of the parties interested in the company are not being revealed, because nondisclosure and confidentiality agreements had been signed.
Comair's various operating licences are regarded as the most valuable unsecured assets of the company, while its fleet of aircraft, valued at about R3.5 billion, are encumbered in favour of the secured creditors.
Comair was negatively impacted by factors such as the Covid-19 pandemic and related lockdowns, and went into business rescue in May 2020. More recently, it was hamstrung by an attempt to cancel a contract to buy Boeing 737 MAX planes, as well as rising fuel prices after Russia invaded Ukraine.
The business rescue practitioners had to suspend flights on 31 May this year and apply for provisional liquidation when Comair could not get any further funding necessary to cover operational costs. – Fin24