After failing to find new funding to keep the firm solvent, the franchise owner of British Airways in South Africa is set to be liquidated.
Comair, which runs British Airways and Kulua branded flights in South Africa, had to cease operations on May 31 due to a lack of funds but was hopeful that it would be able to raise extra capital.
A court motion was filed on Thursday to convert so-called corporate rescue proceedings into a regular liquidation process.
After the pandemic decimated its business and the airline’s resources ran dry, Comair initiated a procedure known as Business Rescue in May 2020. The airline reopened in December 2021 after a reorganization was overseen by so-called “business rescue practitioners.”
In a statement released on Thursday, the airline’s authorized Business Rescue Practitioners stated that they “no longer feel that the Company can be salvaged.”
“Unfortunately, the required finance could not be raised in order for the Company to continue with its operations,” the statement concluded.
With a disastrous purchase of eight Boeing 737MAX aircraft, Comair originally ran into financial difficulties. When the model was grounded worldwide due to safety concerns, the airline had already paid millions of dollars in deposits and had actually taken delivery of one MAX plane.
In the United States, the airline is still claiming compensation from Boeing.
Comair was recently ordered to temporarily ground its entire fleet due to maintenance safety concerns. In recent weeks, rising fuel costs have added to the carrier’s troubles.
Comair CEO Glenn Orsmond asserted last month that the airline was “inherently a sustainable business” and reassured passengers that investors would soon come to the rescue.