South African airline Comair Limited has reported a headline loss of R564 million in its interim results for the six months ending on 31 December 2019.
R450 million of that loss is attributable to the increase in the IFRS 9 loss allowance on the SAA damages claim.
Comair is the only JSE-listed airline operator, with two airline brands: the low-cost carrier (LCC) kulula.com, and British Airways, which it operates under licence in Southern Africa.
Comair Group CEO Wrenelle Stander says, “Comair Limited is facing strong headwinds as a result of its fleet renewal program, the transition of its fleet from South African Airways Technical (SAAT) to Lufthansa Technik Maintenance International (LTMI), the impairment of the SAA claim as well as the extended grounding of the 737 MAX 8.
“We have taken decisive steps to implement far reaching cost-cutting measures and to increase revenue through improved fleet availability and aircraft utilisation. In addition, negotiations with Boeing are underway to mitigate the impact of the grounding of the Boeing 737 MAX 8 and to pursue the full outstanding settlement amount owed by SAA, notwithstanding the provision made by Comair for the full amount. We are also divesting from non-performing investments.”
Stander continues, “A new board is in place which fully understands the challenges and opportunities the business is facing. The board will support the executive management team, to successfully navigate the challenges and leverage the opportunities that lie ahead. It is a great time to reposition the business.”