This archive report was first published on 8 May 2020.
Published on May 8, 2020, an economist warned that the South African aviation industry is facing serious financial problems that may make it difficult for some airlines to survive beyond the lockdown.
Comair, the parent company of low-cost carrier Kulula Airline, has entered into a business rescue due to its financial problems. The company recorded a half-year loss of 564 million rand (30 million USD) and has suspended its trading in the Johannesburg Stock Exchange (JSE).
Comair is not the only airline in trouble. State-owned South African Airways filed for business rescue in December, while state-owned SA Express was placed under "provisional liquidation" last Tuesday.
According to Jannie Rossouw, head of the School of Economic and Business Sciences at the University of the Witwatersrand, the lockdown measures have exacerbated the financial problems of airlines. "This doesn't come as a surprise, several airlines were in financial trouble before the lockdown, so this has worsened their problems," he said.
Domestic airlines will only be allowed to operate in South Africa under stage three of the lockdown. Rossouw added, "This is a sign that the government must be careful about starting a new airline because there's so much uncertainty in the sector."
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