Air France has decided to not return its Airbus A380s to service, accelerating a previous retirement plan for the type because of the coronavirus crisis. The move disclosed today represents a "definitive end" of Air France's A380 operations, the airline says that it took the decision based on "anticipated activity levels" in the wake of the pandemic. Air France has nine remaining A380s – all are currently parked – having earlier this year retired one jet of the type. Under a previous timetable disclosed last year, the airline was set to phase out the A380 by the end of 2022. The retirement of the A380 fleet is part of a plan to operate "more modern, high-performance aircraft" which will make Air France's fleet "more competitive", it says. Air France has introduced A350's and Boeing 787's to its fleet, and has further aircraft of these types on order. The carrier's long-haul operation additionally includes 777's, A330 and A340's, though the A340's are likewise set to be phased out. The airline estimates it will incur €500 million ($540 million) in write-down costs because of the accelerated A380 retirement, and says it will book the loss during the second quarter as non-current expenses. Air France says it owns five of its A380's while the remaining four are leased. Cirium fleets data lists DS Aviation and ALM among the managers of Air France A380's.

Source: Cirium

South Africa’s government has provisionally set aside R3.8 billion ($212 million) for troubled flag-carrier South African Airways and another R164 million for SA Express in the current fiscal year. Department of public enterprises deputy director general Kgathatso Tlhakudi gave the figure during a 20 May presentation before the parliamentary portfolio committee on public enterprises. Tlhakudi pointed out that the budget allocated by the treasury is “under strain” owing to “unplanned spending” to cope with the coronavirus crisis, and that it “will look different in a couple of weeks”. But he highlighted a transfer of R37 billion to state-owned enterprises this year, with the vast majority to electricity utility firm Eskom. The figures also included R3.8 billion to South African Airways in 2020-21, part of a R9.9 billion sum set aside for the medium term. SAA’s allocation includes R4.3 billion for 2021-22 and R1.77 billion for 2022-23. The flag-carrier has been undergoing a business rescue process since December last year, and public enterprises minister Pravin Gordhan has been hoping to create a new, more sustainable airline from SAA. Tlhakudi also mentioned that R164 million had been put aside for regional operator SA Express – which is facing liquidation – mainly to cover liabilities emanating from the early return of leased aircraft.

Source: Cirium

South African carrier Comair’s business rescue practitioners believe there is a reasonable chance of the Johannesburg-based airline’s being saved. The airline’s board opted to enter business rescue on 4 May. Practitioners Shaun Collyer and Richard Ferguson met with creditors and employees on 19 May to outline the carrier’s position. They state that there are “reasonable prospects” for Comair to be rescued, pointing out that the airline is a “critical infrastructure asset” for the country, holding a 39% market share of domestic travel before the coronavirus crisis. Its assets exceed its liabilities but the grounding of the airline, as a result of the South African lockdown on 26 March, means it is unable to generate revenues and has insufficient cash to meet obligations. South Africa’s government is to lift the lockdown in phases but Comair will not be able to restore domestic flights until several of these phases have been implemented. The rescue will involve restructuring the airline’s business, debts and equity to maximise its chances of remaining solvent and continuing operations. Comair will depend on post-commencement finance in order to continue with the business rescue plan which is due to be published on 9 June, with a vote on 24 June. “Support of key stakeholders – namely the banks and lessors – for the business rescue process is therefore required,” the practitioners state. “Without it, we will have no choice but to place the company in liquidation.” Comair has suffered financially from the predicament of flag-carrier South African Airways, against which it had been awarded a R1.1 billion ($60 million) settlement in a competition case. The practitioners state that R790 million of this sum will be “unrecoverable” as a result of SAA’s own filing for business rescue last December. Comair operates as a franchise partner for British Airways and also serves routes with the budget airline brand Kulula. South African air transport is experiencing a critical period as a result of SAA’s and Comair’s rescue, as well as the liquidation proceedings against regional operator SA Express.

Source: Cirium