South Africa's Comair sues Boeing for fraud over B737 MAX

The estate of defunct Comair (South Africa) has announced it is seeking USD83 million in damages from Boeing in a US federal court, citing fraud and breach of contract concerning the purchase of eight B737 MAXs.

In a summons filed in the US District Court in Seattle on February 6, 2023, Comair accuses Boeing of placing profits over safety and having led with a plan of deception. Comair said it had "relied on Boeing's misrepresentations and concealment of material facts in deciding to purchase eight B737 MAX aircraft".

Boeing declined to comment on inquiry from ch-aviation. "We don’t comment on pending litigation," a spokesperson said.

In a statement issued in Seattle, Comair said it had paid Boeing more than USD45 million in advanced payments for seven B737-8s and full payment on the one B737 MAX it had received. ZS-ZCA (msn 60432) was delivered on February 25, 2019, according to the ch-aviation fleets advanced module.

Comair cancelled the order following the worldwide 20-month grounding of the type in the wake of two fatal accidents, but Boeing refused to return the advanced deposits on the seven aircraft it never delivered. The airline said it had "suffered additional damages as a result of the grounding of its B737 MAX for a total loss of more than USD83 million".

The B737 MAX deal is said to have contributed to the demise of the 76-year-old South African airline, which was provisionally liquidated in the South African High Court on June 14, 2022. Its final winding-up has been postponed to June 30, 2023, after 34 unnamed parties expressed interest in submitting offers for Comair as a going concern or for its assets.

Comair said it had entered into a purchase agreement with Boeing on September 19, 2013, for eight B737 MAX aircraft for a total aircraft base price of more than USD98 million.

However, on October 28, 2018, a B737 MAX of Lion Air (Flight 610) crashed after take-off from Jakarta Soekarno-Hatta, Indonesia, killing 189 people, followed by the March 10, 2019, crash of another B737 MAX of Ethiopian Airlines's (Flight 302) that left 157 people dead.

Shortly thereafter, all of Boeing's B737 MAX aircraft were grounded worldwide.

The airline held the franchise for British Airways in Southern Africa and operated South Africa's first budget carrier Kulula Air (CAW, Johannesburg O.R. Tambo).
CH-Aviation

Boeing and Comair Debut Airline’s First 737 MAX

Airline is the first in sub-Sahara Africa to operate the MAX


SEATTLE, Feb. 26, 2019 – Boeing [NYSE:BA] delivered the first 737 MAX 8 to Comair Limited, which becomes the first airline in sub-Sahara Africa to operate the fuel-efficient jet. The airplane is the first of eight 737 MAX airplanes on order for Comair as the airline looks to refresh its fleet and offer better service for its passengers.

“The arrival of the MAX 8 aircraft is a continuation of our fleet renewal programme and builds on the most modern and efficient fleet in South Africa,” said Wrenelle Stander, Executive Director, Comair’s Airline Division. “It is the first of these aircraft to operate in Southern Africa. These newer aircraft, which showcase state-of-the-art technology, will improve our customer experience, enable us to hedge against fuel price volatility and enhance our operating efficiency.”

The new airplane enters a growing African aviation market, where the domiciled fleet has almost doubled in the past two decades. And over the next two decades, Africa will require nearly 1,200 new jets, according to Boeing’s Commercial Market Outlook. Boeing airplanes represent nearly 70 percent of the continent’s in-service fleet.

Comair flies an all-Boeing fleet that includes 18 Next-Generation and seven Classic 737s for its kulula.com and British Airways (operated by Comair) brands. The 737 MAX 8 will allow Comair to achieve 14 percent better fuel efficiency and lower emissions, while flying 600 nautical miles farther than its predecessor.

The MAX’s improved performance is enabled by advanced CFM International LEAP-1B engines, Advanced Technology winglets, and other airframe enhancements. Outfitted with the popular Boeing Sky Interior, the MAX 8 can seat 189 passengers in a single-class configuration.

The 737 MAX family is the fastest-selling airplane in Boeing history, accumulating over 5,000 orders from more than 100 customers worldwide.

“We are delighted to welcome Comair to our growing MAX family. The airline will be able to significantly lower its operating costs, fly farther and provide their customers with a better flying experience,” said Ihssane Mounir, senior vice president of Commercial Sales & Marketing, The Boeing Company. “From the Classic 737 to the Next-Generation 737 and now to the 737 MAX, we are honored to build on our partnership with Comair and support their success in the years ahead.”

Comair mulls B737 MAX deferral citing SA's weak growth

Comair (South Africa) (MN, Johannesburg O.R. Tambo) could defer deliveries of two of the eight B737 MAX 8s it has on order from Boeing (BOE, Chicago O'Hare) owing to South Africa's weak economic growth.

The firm's Chief Executive Officer (CEO) Erik Venter told Reuters that Comair could delay the delivery of two of four MAX 8s due in 2019, to as far out as 2022. Under the original plan, the order would have run from 2019 through to 2021 with pre-delivery payments of USD9.7 million to have been made during 2H FY2017.

Comair said in a 1H FY2017 earnings disclosure in December last year that South Africa's weak economy would continue to squeeze consumer spending thus putting further pressure on airline industry margins. This is expected to worsen if Statistics South Africa's GDP estimates for the first quarter of 2017, due out next week, confirm the country's economy has indeed entered into its eighth recession since 1961. The country's economy suffered a 0.3% contraction in GDP for the last quarter of 2016 and credit downgrades to sub-investment grade earlier in April.

For its part, Comair operates a British Airways (BA, London Heathrow) franchise as well as a low-cost carrier unit, Kulula Air (MN, Johannesburg O.R. Tambo). Collectively, it employs a total of eleven B737-400s and sixteen B737-800s.
Concerning the firm's recent submission of an Expression of Interest (EOI) in Air Botswana (BP, Gaborone), Venter said Comair's proposal was not to acquire a stake in the ailing state-owned carrier, but rather for Comair to operate the service for the Botswana government.
"We'd rather start with a fleet and set up a new operation using Comair's back-end infrastructure," he said.

ch aviation

Boeing and South Africa's Comair Limited Announce Order for Eight 737 MAXs

JOHANNESBURG, South Africa, March 19, 2014 /PRNewswire/ -- Boeing [NYSE: BA] and Comair Limited announced an order today for eight 737 MAX 8s, valued at $830 million at list prices. It is the first 737 MAX order announcement for an African operator. The order was booked in December 2013 and was previously unidentified on the Boeing Orders & Deliveries website.

"We're proud to be the first African operator to announce an order the 737 MAX," said Erik Venter, chief executive officer of Comair, "This investment in Comair's fleet upgrade is fundamental to its business strategy of consistently improving customer service and value, while ensuring a sustainable airline. Our decision to make this investment was not taken lightly and is a critical component in managing our exposure to the volatile fuel price and thus minimizing the impact of the fuel price on airfares."

Johannesburg-based Comair operates Africa's first low cost carrier, kulula.com, offering flights to South Africa's major cities. Comair is also the franchise partner of British Airways, operating its local and regional Southern African routes. The company currently flies an all-Boeing fleet of 25 Classic and Next-Generation 737s on its kulula.com and British Airways (operated by Comair) brands. The order for eight 737 MAX 8s will support future fleet renewal and expansion.

"Comair has grown over the past six decades by providing a product and service of consistent value, reliability and comfort," said Van Rex Gallard, vice president of Africa, Latin America and Caribbean Sales, Boeing Commercial Airplanes. "The unmatched operating economics of the 737 MAX make it the best airplane for Comair's growth strategy. In addition, the 737 Sky Interior, combined with Comair's excellent customer service, will provide an unmatched passenger experience."

The 737 MAX builds on the success of the Next-Generation 737 – retaining efficiency, economics, reliability and passenger appeal that make this family of airplanes the market leader. The 737 MAX incorporates the latest technology CFM International LEAP-1B engines, as well as aerodynamic improvements such as new Advanced Technology winglets, to deliver a 14 percent fuel-efficiency improvement over today's most fuel efficient single-aisle airplanes. Airlines operating the 737 MAX will see an 8 percent operating cost per seat advantage over tomorrow's competition.

Along with superior operating economics, the passenger-preferred 737 Boeing Sky Interior will also come standard on the 737 MAX. Drawing from years of research inspired by the travel experience, the 737 Boeing Sky Interior features modern-sculpted sidewalls and appealing features reveals that draw passenger eyes to the airplane's windows, giving passengers a greater connection to the flying experience.

With today's announcement Comair will have a total of 12 airplanes on order from Boeing, including the eight 737 MAX 8s and four Next-Generation 737-800s for delivery in 2015 and 2016. Since its announcement in 2011, the 737 MAX has amassed more than 1,800 orders worldwide.

Contact:

Comair to Cease Operations

No significant changes to schedules or locations served for Delta customers

ATLANTA, July 27, 2012 /PRNewswire/ -- Delta Air Lines (DAL) today announced its subsidiary, Comair, Inc. will cease operations after Sept. 29, 2012.

In a memo issued today to the Officers and Directors of Delta Air Lines, Don Bornhorst, Senior Vice President of Delta Connection, said:

"While regional flying has and will remain a key component of Delta's network, customer expectations and the unit costs of regional flying have evolved. In response, Delta recently announced its plans to reduce the total number of regional jets in its network while adding more mainline flying. This includes reducing the number of 50-seat regional jets from nearly 350 aircraft to 125 or fewer in the upcoming years. As a result of this reduction and changes to its customer-focused business strategy, Delta has made the difficult decision to cease Comair's operations."

Ryan Gumm, President of Comair, communicated Delta's decision this morning to Comair employees in a memo, the full text of which is included below.

The discontinuation of Comair's operations will not result in any significant changes to Delta's network, which has enough flexibility to accommodate these changes. Currently, Comair accounts for approximately one percent of Delta's network capacity. There will be no disruption to customers and no significant adjustments to Delta's flight schedule or locations served. All customers who travel on the Delta network, whether on Delta Connection flights or mainline aircraft, can continue to make travel plans with Delta as they have in the past.

Cincinnati will continue to be an important market in Delta's worldwide network. Over the past several years, working with community leaders, Delta has right-sized capacity at Cincinnati to better match service to local passenger demand. Cincinnati is now a profitable market for Delta and the city continues to enjoy over 120 peak daily flights, with non-stop service to 49 destinations. No reductions in the number of Delta flights are planned at Cincinnati as a result of this decision.

To All Comair Employees
From Ryan Gumm, President
Subject Comair to Cease Operations
Date July 27, 2012

All,

Today, I am writing to let you know that Delta has made the difficult decision to cease Comair's operations after September 29, 2012.

Delta recently announced its intent to reduce the overall number of 50-seat regional jets in its network from nearly 350 to 125 or fewer in light of the significant changes in the economic and competitive conditions in the airline industry. We believed this announcement would have a negative impact on Comair because we operate some of the oldest 50-seat aircraft in the Delta Connection fleet, which also have the highest unit cost per flight hour. And, in fact, Delta has decided to remove the remaining 16 Comair 50-seaters from the Delta network, leaving Comair with only 28 aircraft in scheduled service. This further reduction of Comair's active fleet will only create higher unit costs, which equates to a business model that is no longer sustainable in this competitive regional environment.

I understand that today's news is very difficult and raises many questions for you and your family. Human Resources is prepared to directly assist you during this time. They will post a memo and other documents on the Human Resources Epic page to keep you informed of the assistance available and to help answer many of your questions. We will also have staff available over the weekend to answer questions if needed. If after reviewing the information on Epic you have any additional questions or concerns, please do not hesitate to reach out to your departmental leadership as well.

The discontinuation of Comair's operations is in no way a failure or a reflection of your work – it is an unfortunate necessity due to the economic limitations of our aging aircraft, cost structure, the long-term outlook for 50-seat aircraft, and our challenging industry and economy. The quality of our operations has continued to be outstanding during our lengthy restructuring efforts, and I am honored to have had the opportunity to lead such a committed team. I am asking that each of you recognize the importance of remaining focused on safety and the job at hand as we continue operations throughout the wind-down period. Your continued commitment and your dedication to a safe and reliable operation is a testament to the professional team we have built here at Comair.

Delta Airlines

Comair anuncia compra de 8 Boeing 737-800 NG

A Comair utilizará os seus novos B737 para modernizar a frota da companhia

aérea de baixo custo da Comair, a kulula.com. As aeronaves estão avaliadas em aproximadamente US$646 milhões pelo preço de tabela.

BOEING