Comair (South Africa) (CAW, Johannesburg O.R. Tambo) will be liquidated after the 76-year-old South African airline could not secure the necessary capital to recommence operations, the administrators said in a statement on June 9, 2022.

Business Rescue Practitioner (BRP) Richard Ferguson said an application was lodged on June 9 to convert the airline's business rescue proceedings into liquidation proceedings. "Despite their best efforts, the BRPs have been unable to secure the capital required for the airline to recommence operations. We did our utmost to secure the funding, but when we were unable to do so, [we] had no option but to lodge the application. It is an extremely sad day for the company, its employees, its customers and South African aviation," he said.

With its two brands - British Airways operated by Comair and budget airline Kulula Air, 40% market share, modern fleet of seventeen B737-800s and five B737-400s, experienced employees, established sales and distribution channels, Comair had been an "inherently viable business".

However, it had faced unforeseen headwinds, including three COVID-related air travel lockdowns, among other things, a "red listing" of South Africa by certain European countries, notably the United Kingdom; the suspension of the company's Air Operations Certificate (AOC) in March 2022 by the South African Civil Aviation Authority (SACAA); as well as significantly high fuel prices experienced in the past five months. Ferguson said that each of these events had a material adverse impact on the business, and the investors had only been able to finance the impact of these events up to a certain point.

"The BRPs ongoing requests to the Comair Rescue Consortium (CRC) to provide a plan to raise the further funding necessary to absorb the balance of these and other potential economic shocks were unsuccessful. In the circumstances, the BRPs approached other lenders to raise the funding required. Regrettably, when this funding could not be secured before the existing funding was exhausted, scheduled flight operations were suspended on May 31, 2022. Comair's BRPs continued the process to secure additional funding from other sources, but despite several parties expressing interest, they were unable to secure sufficient substantive commitment."

Ferguson said that employees and customers who held bookings or were owed refunds would now become creditors of the company.

On June 8, an internal letter from the Comair Chief Executive Officer Glenn Orsmond to employees was leaked to the media in which he suggested the airline could resume flights on September 1, 2022, if funding could be secured. "We like to assure you...that the business rescue practitioners and management are holding ongoing discussions with potential funders to secure restart funding," he had said.

Comair has been grounded since May 31, 2022, when it voluntarily suspended all its flights after running out of funding. At that time, Orsmond said the process to raise the necessary capital was in progress and that he was reasonably optimistic that financing would be secured.

The company had been in voluntary business rescue since May 5, 2020. It restarted operations in December 2020 following a ZAR1.4 billion rand (USD92 million) rescue package (including ZAR500 million (USD32.7 million) capital injection) by the Comair Rescue Consortium (CRC) consisting of former directors and executives. These include US dollar billionaires Rodney Sacks and Hilton Schlosberg, who founded the Monster Beverage Corp. energy drinks brand.

With liquidation, staff will be legally entitled to a once-off payment of up to ZAR28,000 rands (USD1,832), including a once-off amount of ZAR12, 000 rands (USD785), severance pay of up to ZAR12,000 (USD785), and leave pay of up to ZAR4,000 (USD261).