South African carrier Comair has secured capital inflows of R270 million ($19 million) following the sale of its SLOW Lounge business to FirstRand Bank for R250 million and the receipt of a R20 million payment from South African Airways (SAA).
The move is a “significant step” towards the successful conclusion of Comair’s business rescue process, according to its administrators. The process was initiated as the carrier battled heavy losses amid Covid-19.
Comair, which operates the kulula.com low-cost brand and a British Airways franchise on domestic routes, suspended services between 5 July and 1 September because of pandemic restrictions.
“There is still work to be done but these capital inflows, the fact that Comair is back in the skies and again earning revenue coupled with the commitment by the investors to support the viability and sustainability of the business all point to a positive outcome,” states Richard Ferguson, one of Comair’s business-rescue practitioners.
The payment from SAA was part of R1.1 billion that the state-owned business owes Comair under a damages settlement for anti-competitive behaviour.
SAA made an initial payment of R289 million in February 2019, with the balance payable in instalments until July 2022. These payments ceased when SAA entered administration in December 2019.
Comair currently operates six Boeing 737-300s, Cirium’s data shows, and has nine aircraft – four 737-800s and five 737-400s – in storage.