Broke airline Comair announced that it is unlikely to operate before November 2020 after Business Rescue Practitioners (BRPs) assisting the embattled company released a plan of action to get them back on track.
The airline requires a "substantial cash injection" and are short on affordable fuel suppliers who could assist them with cutting down costs and getting back in the sky.
Comair need 'significant cash injection'
BRPs have said on Tuesday 2 June that in order for the airline to return to a sustainable business model, they will have to make some significant changes to their operations.
These changes and interventions include the acquisition of software company Infinea's 50% shareholding of South African aerotech company Nacelle, with negotiations over the purchase having begun prior to Comair's initiation of business rescue procedures.
A further 30 potential funders have been contacted over providing support to the airline, with six of those engaging in "progressive discussions" with BRPs.
The BRPs also said on Tuesday that the bloated 27 aircraft fleet would need to be trimmed down, with consultation between BRPs and several international and domestic agencies having solidified the opinion that a smaller fleet would be easier to manage and more beneficial for the airline's offering to clients.
They said that creditors would be made whole by a targeted date of 31 October following the liquidation of assets, including:
The sale of non-core assets;
- Any equity capital raised and/ or;[*]The issuing of shares.
Employees remain in retrenchment process
BRP Shaun Collyer addressed concern over their employees who have been placed on unpaid leave and who are facing retrenchments are unfortunate casualties of the COVID-19 pandemic as well as the company's mismanagement.
"This unfortunate hardship has been imposed on Comair employees as a consequence of the COVID-19 lockdown and State of Disaster Act," he said.
The group said that their headline earnings per share (HEPS) will decline by at least 100% from the 197.2 cents it reported from the previous financial year.
The BRPs said in April that existing bookings could be refunded or rebooked within 12-months of their departure date. There will be no charge for any changes made before 1 November 2020.