Kulula aircraft likely to remain grounded for at least six months
The eye-catching green machines are unlikely to take to the skies anytime soon.
As a result of the nationwide lockdown, Comair’s low-cost carrier, Kulula, is likely to remain grounded until at least October 2020.
This was announced in a statement issued by Comair on 30 April. According to the airline, severe financial distress, caused by the COVID-19 pandemic and its subsequent impact on air travel, has compromised Kulula’s operational potential. Adding to the airline’s woes are stringent risk management regulations which will only allow for full domestic air travel at Level 2.
Comair records operating loss of R562 million
Comair also noted that the predicament faced by South African Airways (SAA), which was placed under business rescue administration prior to the outbreak, had resulted in fierce financial losses, explaining:
“… as a result of South African Airways going into Business Rescue and failing to pay Comair an amount of R790 Million (Net R505 Million), the Company made an operating loss for the period of R562 million.”
While South Africa readies itself to enter Level 4 lockdown on Friday 1 May, uncertainty surrounding the timeline of future risk stages persists. This poses particularly daunting prospects for local airlines. Kulula’s entire fleet has been grounded since 17 March.
In addition to lobbying for governmental assistance, Comair has embarked on negotiations with banks with the hope of securing bridging finance. Discussions in both regards are on-going.
In the meantime, however, the airline is on a furious mission to reduce costs, which includes Section 189A retrenchments and a reduction in executives.
Kulula will only take to the skies in October or November 2020
While Comair and its carrier, Kulula, languish under the financial stress of lockdown, an estimated time of operational arrival rests near to the end of 2020. If these estimations turn out to be correct, Kulula would’ve been inactive for 10 months. Comair said:
“The level of the prevailing COVID 19 risk will determine the progression from Risk Level 5 to Risk Level 1. In terms of the Governments requirements, it is not anticipated that Comair will commence operating prior to October or November 2020.”
The airline added that although it had experienced an era of prosperity prior to COVID-19 pandemic and subsequent lockdown, its profits had been eaten away by inactivity. Comair noted:
“… the five week lockdown has caused the situation to rapidly deteriorate to a point where the Company finds itself in a very difficult financial position…”
The airline ended its statement by asking shareholders “to exercise caution when dealing in the Company’s securities”.