The Comair airline warns it will probably not be able to do business again until October or November, based on what is known about the government’s risk-adjusted containment levels. On Thursday, its share price fell 14% to R1.10.
Comair, which operates British Airways’ domestic franchise as well as low-cost airline Kulula, says it finds itself in a very difficult financial position.
It has not generated any revenue since the restriction, so it continues to retire.
They have also cut their top management team, which will bring in a saving of R23m, closes lounges at airports, sells the Course restaurant and cancels the deal in terms of which they would buy Star Air Cargo.
Comair has begun negotiating with banks to get bridging financing, and is also considering additional share capital in the form of a convertible preference share or convertible debenture issue.
Comair says it is also in talks with American aircraft manufacturer Boeing about canceling the Boeing 737 Max 8 aircraft it has ordered, and about possible reimbursement by Boeing for the 737 Max aircraft already delivered, but on the ground had to remain after two crashes of this model elsewhere in the world.
Before the Covid-19 pandemic, Comair was already in a tough position, mainly because of the claim it won against the South African Airways, which SAA can no longer pay in full due to its own financial crisis.
He already asked his employees last week to go on leave or unpaid leave because he can no longer pay their salaries.
In March, Comair expected about 200 or 20% of its total workforce to be laid off in the current situation.
