Former Comair (South Africa) (CAW, Johannesburg O.R. Tambo) co-chief executive Gidon Novick has announced plans to establish a new low-cost carrier in the South African market by the end of the year.
In an interview with eNCA news, Novick said that despite the COVID-19 pandemic, a viability study had shown there is room for a new entrant. He, however, declined to provide any further details stating only that a launch date was still being finalised.
Following a 10-week moratorium, South Africa allowed the resumption of domestic commercial flight operations - for "business purposes" alone - on June 1. Since then, Mango Airlines, CemAir, Airlink (South Africa), and FlySafair have all resumed domestic flights.
However, Comair, which operates a British Airways franchise and its Kulula Air low-cost brand, which Novick helped found, has remained grounded given ongoing business rescue proceedings. The privately-owned carrier holding is assembling a business restructuring plan which could see half of its fleet withdrawn alongside layoffs and asset disposals.
For its part, given what has been termed its "challenging" financial standing, Mango, a wholly-owned subsidiary of bankrupt South African Airways, is continuing to work on initiatives to improve its cash flow, and this includes the sale of assets, negotiating payment terms with creditors, and converting to variable cost structures where possible.
According to SAA's business turnaround plan, the LCC, which operates fourteen leased B737-800s (two from Carlyle Aviation Partners, four from GECAS, and eight from Macquarie AirFinance), requires ZAR1 billion rand (USD57.7 million) in recapitalisation funding to be used to cover working capital requirements and restructuring costs (ZAR510 million (USD29.4 million)), and two tranches of debt conversion by SAA involving an SAA Technical debt to be assumed by SAA (ZAR150 million (USD8.66 million) and a further ZAR290 million (USD16.73 million)).
