Business rescue practitioners of Comair have lodged an application in court to liquidate the troubled company.
In a statement released by the practitioners on Thursday, they said the application has been made to court to convert the business rescue proceedings into liquidation.
Comair runs Kulula and British Airways flights.
Richard Ferguson, one of the practitioners, said Comair’s two airline brands British Airways and Kulula.com were viable businesses but unfortunately, despite efforts to save the company, they were unable to get capital required for the company to resume operations.
“We did our utmost to secure the funding, but when we were unable to do so had no option to lodge the application. It is an extremely sad day for the company, its employees, its customers and South African aviation,” Ferguson said.
He said after entering business rescue, Comair was able to start flying again when the Comair Rescue Consortium (CRC) invested R500m for a 99% share of the equity in the company at the time.
“Although the amounts indicated by the business rescue plan were invested, the company unfortunately faced unforeseen headwinds including three further Covid-related air travel lockdowns,” he said.
These included the red-listing of SA by certain European countries and the suspension of the firm’s aviation certificate in March by the regulator, and high fuel prices in the past five months.
With these challenges facing the company, practitioners could not get further funding that would enable the company to absorb the shocks in the market.
It was based on these challenges that scheduled flights and operations were suspended on May 31.
On June 1, customers where left stranded when the company announced that it had grounded its flights as it did not have enough funds to run its operations.
Ferguson said that the company’s employees and customers who held bookings or were owed refunds will now become creditors of the company.