Comair calls off acquisition of Star Air businesses
The company was due to pay R75m for Star Air Maintenance and Star Air Cargo
Comair, which operates British Airways (BA) and Kulula in SA, said on Friday that it has called off its acquisition of Star Air Maintenance and Star Air Cargo, without going into detail.
The BA franchisee said earlier in March it was seeking to cut jobs, with the financial distress it was facing after the grounding of its Boeing 737 MAX 8 aircraft being compounded by the Covid-19 crisis.
The airline said in May 2019 it was seeking to acquire Star Air businesses to extend its diversification strategy into the leasing of aircraft, while also providing Comair with the expertise and systems to establish a base for heavy maintenance checks on its fleet of Boeing 737-800 aircraft.
The deal would have seen the company pay R75m, as well as enter into a profit-share agreement, capped at R250m. On March 31 the deal was terminated by mutual agreement, Comair said.
The group reported a net loss of R555.6m in its six months to end-December, partly due to a failure by state-owned carrier SAA to make a payment related to a settlement in an anti-competitive behaviour case.
SAA, which has gone into business rescue, was supposed to pay Comair a total of R1.1bn as part of the settlement agreement. Comair alleged that SAA paid travel agents to divert customers to its flights between 2001 and 2006.
In morning trade on Friday, Comair’s share price was up 0.72% to R1.40, having lost about 53% of its value so far in 2020.