South African Airways (SAA) is talking to British Airways (BA) about the possibility of taking over its franchise agreement in South Africa, John Lamola, SAA’s interim chair and CEO, confirmed on Friday.
BA cancelled the franchise agreement it had with Comair after the SA company went into provisional liquidation in mid-June.
Recently, Comair’s provisional liquidator, said his understanding was that BA was looking for a new partner in the SA market.
BA does not comment on franchise agreements as it involves commercially sensitive information, the company previously told Fin24.
Local aviation experts have speculated that BA would ideally prefer a full-service airline as a franchise partner in SA. Full service usually offers a global loyalty programme, a high flight frequency, and a comprehensive route network.
Comair, which at some point accounted for about 40% of SA’s domestic aviation market, operated its own low-cost airline, kulula.com, and domestic and regional British Airways flights as part of the franchise agreement.
Comair was negatively impacted by the Covid-19 pandemic and related lockdowns and went into business rescue in May 2020. It was also hamstrung by an attempt to cancel a contract to buy Boeing 737 MAX planes, and rising fuel prices after Russia invaded Ukraine.
British Airways plc (BA) is a separate company from Comair, and British Airways’ services have been unaffected and continue to operate as usual between South Africa and its hub in London.
Lamola told Fin24 that the regulatory process to obtain approval for the Takatso Consortium to buy 51% of the shares in SAA is still underway and the consortium is not yet involved in the running of the airline.
Source: Engineering News
