On Friday, June 3, the National Union of Metalworkers of South Africa (NUMSA) picketed the premises of South African airline Comair. The labor action came after Comair management decided to halt operations from June 1 citing lack of funds to meet high fuel costs. The airline also owns low-cost carrier kulula.com and has the franchise to operate British Airways domestically.
NUMSA represents around 700 Comair employees. When union representatives met Comair CEO Glenn Orsmond to seek clarity on the situation, the company failed to provide answers. “We asked whether employees would be paid their salaries during the period of the suspension. Unfortunately management would not confirm, ‘yes’ or ‘no’ in response to that question,” NUMSA said in a press statement.
“We asked how long the suspension of operations would be in place. They could not say because it depends on whether the funding can be raised by the BRPs (Business Rescue Practitioners),” the union added.
Comair had voluntarily entered into a business rescue process in May 2020. During this process, a financially distressed company is protected from claims by the creditors while the BRPs, under whose command the company is placed, work out a turnaround strategy.
NUMSA had objected to the business rescue process at the time, arguing that this was merely a guise under which the company intended to carry out restructuring. Two years later, there is no sign of a turnaround.
In March, Comair’s Air Operator Certificate (AOC) was suspended for five days by the South African Civil Aviation Authority (SACAA) which found multiple lapses in its safety mechanisms, including “three level 1 findings” that posed “an immediate risk”.
Less than three months later, after selling plane tickets at up to 30% discount until May 31, Comair announced on June 1 at the last moment that it has decided to suspend operations for lack of funds.
“Did Comair executives — who work closely with business rescue practitioners Richard Ferguson and Neil Hablutzel and are constantly aware of the company’s financial situation — proceed with the sale of discounted fares knowing full well that its aircraft would never take off?” questioned an article in Daily Maverick.
“The grounding and suspension of the airline has left thousands of passengers deeply inconvenienced and management handled the situation very poorly,” NUMSA said. It further questioned “the role of the BRPs”, Shaun Collyer and Richard Ferguson, who were “paid exorbitantly” and yet “were seemingly unable to foresee this financial hurdle.”
The unions, which have previously called for the CEO’s resignation multiple times, have now declared: “We will demonstrate until Glen Orsmond marches out of the buildings permanently! This airline can be saved but as long as Orsmond and the BRP’s are at the helm, it will continue to nosedive.”