The shares and assets of South Africa’s defunct airline Comair have been put up for sale, including the brand, trademarks, Air Operators Certificate (AOC), and domestic air service license of its low-cost subsidiary Kulula.com.
In June 2022, Johannesburg-based Sechaba Trust was appointed as the provisional liquidator of Comair. This week, Christopher Monyela informed the media that the administrators obtained an order from the High Court, lifting the suspension of the airline’s domestic operating license. The order allows the liquidators to sell the company’s assets and complete the liquidation of the business.
Provisional liquidation of Comair
Comair operated scheduled regional flights as a British Airways franchise and domestic flights under its low-cost carrier Kulula.com. Following a series of financial and logistical challenges, the airline ceased all operations, hoping to raise funds and grace the South African skies again.
However, on June 14, 2022, the court order placed the business under provisional liquidation. One month later, the liquidation order was extended until December 13, 2022, but Sechaba Trust applied for another extension. Following its approval, the court return date for the airlines’ final liquidation was set for June 30, 2023.
Photo: Nadezda Murmakova | Shutterstock
This would hopefully allow the organization enough time to initiate the sale of the airline and its assets. According to ch-aviation, the provisional liquidators said that an unnamed party was interested in buying the defunct carrier, including the licenses and intellectual property like the Kulula brand.
The potential buyer was to analyze the company’s records and conduct due diligence before proceeding with the transaction, which could take up to four months. At Comair’s peak, it held about 40% of South Africa’s domestic market.
Comair’s most valuable assets
During the liquidation process, Comair’s Aircraft Operator’s Certificate (AOC), which allowed it to conduct commercial airline operations, was suspended by the South African Civil Aviation Authority (SACAA). Simultaneously, the carrier’s international license was canceled, while the Air Services Licensing Council (ASLC) suspended the domestic license.
Photo: Boeing
The joint liquidators immediately contested the suspension, saying the council’s decision was unlawful. The AOC and the Air Service Licenses were Comair’s most valuable unsecured assets, which may hold the most significant possibility of realizing a dividend for the company’s concurrent creditors.
Comair operated regional flights on British Airways aircraft, while the low-cost carrier Kulula operated domestic flights with its own fleet of five aircraft, including four Boeing 737-800 and one 737-400. The company’s fleet is valued at $182 million (ZAR3.5 billion) and is encumbered in favor of secured creditors.
Comair’s lawsuit against Boeing
In September 2013, Comair entered a purchase agreement with Boeing to acquire eight B737 MAX aircraft for a base price of nearly $100 million. The airline paid an advance of over $45 million, and the aircraft delivery of the narrowbodies was meant to start in 2019.
Photo: Wirestock Creators/Shutterstock.
Following the worldwide grounding of the aircraft type, the planes were never delivered, and Comair filed a lawsuit against the aircraft manufacturer. The airline accused Boeing of concealing information regarding the 737 MAX and is claiming damages of up to $83 million.
According to ch-aviation Christopher Monyela confirmed that Comair will continue to pursue the damage claims. Before ceasing operations, the airline operated flights from Johannesburg OR Tambo Airport (JNB).
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Source: ch-aviation