Insure your car, home and valuables with iWYZE
Financially distressed low-cost airline 1time would operate scheduled flights as normal as it goes through a “business rescue” process in an attempt to return the airline to profitability.
Company CEO Blacky Komani said that the airline had applied for the rescue this week under the Companies Act. This would give it protection from creditors while it “reorganises the business”.
“What business rescue does is give us the protection we need for a few months while we agree on a plan with creditors and other stakeholders so they will support the airline into the future,” Komani said. “For the next few months we will operate under the temporary supervision of a business rescue practitioner approved by the Companies and Intellectual Property Commission.”
Retrenchments were expected. Mike Bond, the 1time commercial director, said the airline employed 1 100 staff in two subsidiaries, 1time Airline Proprietary Ltd and Jetworx Aircraft Services Proprietary Ltd.
The airline industry was operating in a tough market which had contributed to its situation, he said.
“The spike in airport fees and taxes from the Airports Company of SA last year, with volatile oil costs and other input costs has had a major impact on the airline industry, not just 1time. We’ve had to deal with it and push up prices, which has resulted in a softening of demand,” said Bond.
Durban-based airline Velvet Sky was liquidated earlier this year, less than a year after it took to the skies. Velvet Sky’s creditors had gone to court and forced the airline into liquidation, after it failed to secure a business rescue.
Comair, which operates Kulula and the British Airways franchise in SA, also reported losses for the first time in almost 20 years last year.
1time was in the headlines earlier this month when two flights experienced engine failure. “The two issues were unrelated, but yes it is not great to deal with all of this at the same time. However, we are optimistic that 1time will fly out of this storm,” Bond said.