The Discovery Group has offered to prepay R100-million to Comair for future services that the airline offers to Vitality as its kulula.com flights are due to take off to the skies again from 1 December.
Comair, which operates kulula.com and British Airways flights in SA, was thrown a lifeline by several of its former board members and executives, called the Comair Rescue Consortium, pulling it out of business rescue that the company was placed under on 5 May 2020. British Airways flights were expected to resume on 9 December.
As all Comair flights were grounded during the business rescue process, it meant that Vitality customers who had become accustomed to discounted flight rates were suddenly left without this benefit, potentially affecting the perceived value of the rewards scheme among some Discovery customers.
Discounted flights are a big selling point for loyalty and rewards programmes. For Discovery's Vitality, the relationship with airlines meant saving over R500-million for its members in 2019 through over 1.3-million discounted flights customers had booked.
During its annual general meeting on Thursday, Discovery said it made business sense to provide some of the much-needed working capital to Comair to be able to provide this benefit to its customers.
"We are a buyer of massive amounts of air tickets from Comair. In a sense by prepaying to the quantum of those tickets that we know we have to spend on during the next years, we are hoping to help Comair get up and running once again because we believe strongly in the management team," said Discovery Group CEO Adrian Gore.
Discovery said the successful resumption of Comair's activity is of great benefit as Vitality members and Discovery Bank clients get up to 75% off on kulula.com and British Airways flights. The financial services group has been encouraging its customers to support the airline company again after resuming its agreement with kulula.com. Comair said FNB's eBucks rewards has also resumed the arrangement it had with it.
Discovery SA CEO Hylton Kallner, said financially, the group has not entered into any long-term financing agreement with Comair other than the R100-million prepayment for flights.
"Our members have historically accessed approximately one-million discounted flights annually through Comair so it's an important benefit and in the best interests of our members that it is sustained," said Kallner.