Comair flexes its wings as Competition Tribunal approves merger
A relatively unknown company called Bidco has been given the green light to merge with troubled Kulula owner Comair after approval from the Competition Tribunal on Friday.
The merger, which the tribunal approved during on online hearing, will see Bidco acquire Comair and in particular its B-BBEE shareholding.
Comair, which operates low-cost carrier Kululu as well as the domestic British Airways franchise, went into business rescue on May 5.
Its JSE listing was suspended the same day.
The carrier offered scheduled airline services in SA as well as to certain Sadc countries and the Indian Ocean islands.
Under the terms of the merger, Bidco will not be permitted to retrench any employees for three years from the day operations begin.
However, the company warned that 200 employees will face compulsory retrenchments for what it called “operational reasons” in the months after the merger's implementation, a statement on Friday said.
The statement mentioned that a number of additional B-BBEE purchasers “who are agreeable to participating in this initiative on mutually acceptable terms”.
The company did not provide further details.
The deal was approved by Comair’s business rescue practitioners as part of its rescue plan.
According to the statement, the Competition Commission — which assesses large mergers before referring them to the tribunal for a decision — recommended that the transaction be approved subject to certain conditions.
The commission found no competition concerns arising from the transaction.
Kulula, which took to the skies for the first time in July 2001, was one of SA's first true low-cost carriers.
With its cheeky on-board safety announcements and pay-as-you-go in-flight meals, it quickly earned a loyal after among SA travellers.
Gidon Novick, one of Kulula's founding directors, later left the company after an alleged boardroom tussle.
Novick is allegedly planning to launch a new low-cost airline. While the as-yet unnamed airline still has no formal launch date, it is believed to be imminent.