The shares and assets of Comair have been put up for sale, including the brand, trademarks, Air Operators Certificate (AOC), and domestic air service license of its low-cost subsidiary Kulula.com. The airline was under financial and logistic challenges and had ceased all operations hoping to raise funds. On June 14, 2022 the court order placed the business under provisional liquidation. One month later, the liquidation order was extended until December 13, 2022.
Johannesburg-based Sechaba Trust was appointed as the provisional liquidator of Comair. In December 2022, the Sechaba Trust applied for another extension. After approval from the court, June 30, 2023 was set as the airlines’ final liquidation date.
This week the administrators obtained an order from the High Court, lifting the suspension of the airline's domestic operating license. The order allows the liquidators to sell the company's assets and complete the liquidation of the business.
According to sources, an unnamed party was interested in buying the airline, including the licenses and intellectual property like the Kulula brand, the provisional liquidators claim. The potential buyer was to analyze the company's records and conduct due diligence before proceeding with the transaction, which could take up to four months. Comair's it held about 40% of South Africa's domestic market during its glory days.
During the liquidation process, Comair's Aircraft Operator's Certificate (AOC), which allowed it to conduct commercial airline operations, was suspended by the South African Civil Aviation Authority (SACAA). Simultaneously, the carrier's international license was canceled, while the Air Services Licensing Council (ASLC) suspended the domestic license.
The joint liquidators immediately contested the suspension, saying the council's decision was unlawful. The AOC and the Air Service Licenses were Comair's most valuable unsecured assets, which may hold the most significant possibility of realizing a dividend for the company's concurrent creditors.
Comair operated regional flights on British Airways aircraft, while the low-cost carrier Kulula operated domestic flights with its fleet of five aircraft, including four Boeing 737-800 and one 737-400. The company's fleet is valued at $182 million and is encumbered in favor of secured creditors.
In September 2013, Comair entered a purchase agreement with Boeing to acquire eight 737 MAX aircraft for a base price of nearly $100 million. The airline paid an advance of over $45 million, and the aircraft delivery of the narrowbodies was meant to start in 2019.
Following the grounding of MAX, the planes were never delivered, and Comair filed a lawsuit against Boeing accusing them of concealing information regarding the 737 MAX and claimed damages of up to $83 million. Going ahead, the airline is planning to pursue the damage claims.