Thursday, February 14, 2013

■ SOUTH AFRICA: Comair Ltd posts $9mln profit for H2 2012 as Middle Eastern carriers begin to bite.

Comair LtdSouth Africa's Comair Ltd, the owners of LCC Kulula (MN) the BA Comair franchise, has posted an after-tax profit of USD8.97million (ZAR79million) for H2 (July - December 2012) as revenue influx grew 20% on the same period in 2011. 

Kulula's new 737-800
Kulula's new 737-800 (Kulula)
Comair states that its growth in revenue was mainly attributable to the fuel surcharge on British Airways tickets and Kulula’s improved pricing capability and revenue integrity processes emanating from its new inventory management system. In-house catering facility and other cost saving initiatives have also continued to deliver "meaningful" results.

In addition, Kulula's four new Boeing 737-800s, introduced during the period, further contributed to increased revenue generated per  flight, while at the same time improving aircraft fuel efficiency. The four new aircraft were brought onto the period's statement of financial position which ensured "excellent financing rates."

Regionally, Comair CEO Erik Venter said the entry of Emirates(EK) into the Zambia/Zimbabwe market had had a negative knock-on effect onto the traditionally strong Harare - Johannesburg route:
"Africa is looking a bit shaky at the moment," Mr Venter said. "With Emirates flying directly to Harare, Lusaka and Luanda and going through its hub in Dubai, we have seen a drop in traffic through Johannesburg. Consequently, those routes from Johannesburg have taken quite a knock."
Source [BusinessDayLive]

In its 2011/2012 year end declaration, Comair declared a meagre USD2.2million profit as oil prices and hefty airport charges took their toll. For H2 2012 however, Comair states that it the mitigating factor was the continued devaluation of the Rand against the US Dollar that "had driven the Rand price of fuel and Dollar-based technical services to record levels". 

With the domestic market contracting 6% this last half, Comair said it did not foresee any early growth in market volumes as "ticket prices will remain at the levels necessary to recover such escalating costs," but expressed optimism in good growth opportunities for its travel business, flight training facility, catering business and airport lounges. 

Download a copy of Comair's Interim Results pamphlet for December 2012 here.