JOHANNESBURG - South Africa’s Comair, which is under bankruptcy protection, intends to halve its fleet of aircraft as part of efforts to rescue the company, its administrators said on Friday.
Comair, which operates the local British Airways franchise and budget airline kulula.com, filed for business rescue, a South African form of bankruptcy protection, last month after restrictions aimed at curbing the spread of the coronavirus forced airlines to stop flying.
Its shares were suspended on the Johannesburg Stock Exchange (JSE), but its administrators said in a notice on the JSE on Friday that key elements of its business rescue plan included cutting its operational fleet in half and renegotiating and/or refinancing its aircraft finance and lease agreements.
Comair could also issue shares to investors in a recapitalisation, it said, warning that current shareholders could be “substantially diluted”.
The company has a fleet of some 27 Boeing planes. It intends to keep 13 737-800s and three 737-400s, it said earlier this week.
Earlier this week ,the airline operator also warned shareholders that its profits for the year to the end of June would fall more than 100 percent only days after the airline filed for voluntary business rescue.
Comair said that it expected its earnings a share and headline earnings a share to plummet far below the 192.4cents and 197.2c respectively recorded during the corresponding period last year.
The company reported a R564 million loss for the first half of 2020 following an unprecedented situation due to the coronavirus lockdowns that saw the global aviation industry facing a near collapse.