• British Airways Tile
    British Airways
    IATA/ICAO Code:
    BA/BAW
    Airline Type:
    Full Service Carrier
    Hub(s):
    London Heathrow Airport, London Gatwick Airport
    Year Founded:
    1974
    Alliance:
    oneworld
    Airline Group:
    IAG
    CEO:
    Sean Doyle
    Country:
    United Kingdom
    Loyalty Program:
    British Airways Executive Club
    Region:
    Europe

After years of doing business together, British Airways has canceled its franchise agreement with Comair. The South African airline, famous for sporting the British Airways livery in Southern Africa, entered liquidation in early June, which triggered a clause allowing BA to walk away from the struggling carrier. With the termination of this agreement, it is anticipated that British Airways could soon be seeking a new partner to fill this role in South Africa.

A terminated contract

Comair has been operating regional and domestic flights in South Africa for years in iconic British Airways livery, providing valuable onward connectivity for many of BA's passengers arriving from London, as well as an essential service for local travelers. But as Comair failed, the British carrier was free to pull out of the agreement, leaving a hole in the market just waiting to be filled.

According to the provisional liquidator appointed to Comair, Cloete Murray, the agreement between the two airlines had a 'cancellation trigger' in-built, which would come into effect if Comair was faced with insolvency. Fin24 reported this morning that BA had indeed canceled its agreement with Comair.

British Airways Comair
Comair will need to repaint all of its aircraft with British Airways liveries. Photo: Boeing

Comair and its subsidiary Kulula accounted for some 40% of the domestic South African market. Other carriers have attempted to pick up the slack, but BA has lost an incredibly important connecting partner. But it might not be giving up on its position in South Africa. Murray commented,

"It is my understanding that BA is now looking for a new partner in the South African market,"

There are a number of scheduled carriers that would undoubtedly be in the market for a lucrative contract to partner with British Airways, although it's unlikely any would be keen to go down the franchise route. Airlines like Airlink, CemAir and FlySafair have strong brands of their own, and while they may look favorably on a codeshare or interline with BA, it's unlikely they'll be repainting any of their airplanes in the Chatham Dockyard scheme.

BAB-Comair-KUL-MAX8_K66085-1
Photo: Boeing

What will become of Comair?

While Comair has run out of money, it is not entirely bereft of value as a business. For a start, its operating licenses are a highly sought after unsecured asset, with other operators and investors likely keen to get their hands on them. Some 21 parties are reported to have expressed an interest in buying part of the Comair assets since its liquidation was announced weeks ago.

The airline's planes are its own, and are valued at around R3.5 billion ($212 million). However, these are earmarked for the creditors to which the airline owes money, so will be unlikely to be offered for sale, at least not by Comair itself. Should the airline, by the greatest stretch of one's imagination, get back on its feet, it would not be allowed to use those planes without a thorough repaint to remove all trace of the BA brand.

Source: fin24