Comair (South Africa) (MN, Johannesburg O.R. Tambo) launched a company-wide restructuring on March 23, which it described as an attempt to ultimately improve efficiency and financial sustainability, the South African business news site Fin24 reported.

The reorganisation at the British Airways franchisee includes the start of retrenchment under Section 189 of the country's Labour Relations Act, which allows employers to dismiss employees for operational requirements.

How many jobs will be cut has yet to be decided, but there are reportedly mounting losses across several of Comair's businesses, which include low-cost brand Kulula Air, as well as airport lounges, training, and catering.

“Despite our efforts over the past few months to preserve cash, maintain liquidity, divestment from nonperforming acquisitions, aggressive cost reduction across the group, taking back control of the fleet and unlocking further operational efficiencies, more remains to be done,” said CEO Wrenelle Stander in a statement.

Reducing staff numbers was a decision taken with “great regret,” she added. “We continue to pursue cost reduction measures across the group to mitigate the impact on our staff.”

The move comes several weeks after Comair reported an operating loss of ZAR564 million rand (USD32 million) in its interim results for the six months ending December 31, ZAR450 million (USD26 million) of which was attributable to an increase in the loss allowance under the IFRS 9 financial reporting standards on a South African Airways damages claim.

On February 15, 2019, SAA agreed to pay its rival carrier ZAR1.1 billion rand (USD78 million at the time) to settle a longrunning anti-competition case, with a payment schedule running until July 28, 2022. The flag carrier failed to make a payment due on December 28, 2019, having filed for bankruptcy earlier that month.

“The future recoverability of the amount outstanding from SAA remains uncertain,” Comair admitted in a February 26 statement accompanying its results.

The restructuring announced on March 23 comes amid a tough economic climate worsened by the “unprecedented crisis” of the coronavirus pandemic, Comair said.