Comair announced on Friday it is cutting about 400 jobs as the airline tries to turn its fortunes around.
It said in a statement the company has adopted a business rescue plan.
The airline said its turnaround plan will focus on reducing operating costs and growing ancillary revenue.
“This will see the current workforce reduced from about 2,200 employees to 1,800 through voluntary retrenchment and early retirement programmes, as well as the section 189 retrenchment process that began prior to business rescue continuing.
“It is intended that the fleet be restored to 25 aircraft, including two Boeing Max aircraft,” Comair said.
The aircraft will return to service from December with a seven-month ramp-up period until June 2021.
“In terms of the business rescue plan the preferred investment consortium, comprising a number of former Comair board members and executives, will invest fresh equity of R500m in return for a 99% shareholding once the suspensive conditions set out in the business rescue plan have been met. Up to 15% of this will be allocated to a suitable BBBEEE partner within 12 months,” the airline said.
It said R100m of the amount would be paid in two equal tranches as secured post-commencement finance.
“Additional funding from lenders of R1.4bn is required and will comprise R600m in new debt. The remaining R800m will be deferred debt, with capital payments deferred for a year and interest for six months.”
Comair will be delisted from the JSE and a new board constituted.
CEO Wrenelle Stander welcomed the adoption of the business rescue plan.
“When the lockdown happened, business rescue became the only responsible course of action. Had we not made that tough decision Comair would not have flown again. There may still be a few bumps on the way ahead, however now that the plan is adopted, at last clearer skies are now in sight,” Stander said.