Comair ran British Airways flights and kulula.com for decades. In 2022 it was liquidated. What a capital-heavy business teaches.
Founded as Commercial Air Services in 1943, Comair launched South Africa’s first low-cost airline in 2001. It entered business rescue in 2020 and was liquidated in 2022.
Comair began as Commercial Air Services, formed in 1943 by pilots who had served in the war, and started scheduled services between Rand Airport in Johannesburg and Durban in 1948. It later expanded into jets after South Africa deregulated airline routes in 1991, and became a British Airways franchisee. In 2001 it launched kulula.com, South Africa’s first low-cost airline; the name means “it’s easy” in Zulu and Xhosa.
Investing in the fleet
Airlines are capital-hungry. Comair committed R3.5 billion to a fleet upgrade, ordering eight Boeing 737-800s in 2013, and announced a R9 billion order for eight Boeing 737 MAX aircraft in 2014.
Pandemic and exit
Comair entered voluntary business rescue on 5 May 2020 because of the COVID-19 pandemic, and suspended operations for a time before resuming in September 2021. On 1 June 2022 it suspended flights again pending additional funding, and on 9 June 2022 the business rescue practitioners said there was no reasonable prospect of rescue and the companies were placed in liquidation.
Lessons for business builders
- High fixed costs and long-term orders need a cushion. Aircraft and leases keep costing money when planes stay on the ground.
- Funding is part of the operating plan. The decisive question in 2022 was additional funding.
- A good product is not a guarantee. The brand was well known, yet the economics of the sector left little margin for shocks.