Friday 1 March 2024

When Comair fails to raise funds, business rescue experts feel the company is doomed

By Business Unusual Staff

Comair's business rescue specialists declared on Thursday that the airline had been unable to collect the necessary funds to maintain operating. The BRPs informed creditors in a notice released on Thursday that they no longer feel there is a reasonable chance the company may be saved. Although the most recent letter does not mention liquidation, the BRPs did say on Tuesday that if fundraising attempts failed, the next step would be to transition from company rescue to liquidation.

The BRPs have given the existing owner, the Comair Rescue Consortium (CRC), until May 31 to come up with a feasible plan for continuing operations. Raising additional funds "to satisfy all financial commitments when they fall due in the ordinary course of business" and negotiating with lenders regarding arrears amounts were among the items on the list.

The BRPs suspended all Comair's and British Airways (run by Comair) flights on June 1 as a result of this failure. For the previous two years, Comair has been in business rescue. Increased debt from pre-epidemic fleet renewal plans, the impact of the Covid-19 pandemic on the aviation business, and, most recently, rising fuel costs have all weighed on the company.


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