Wednesday, September 11, 2013

■ SOUTH AFRICA: Comair Ltd profits soar to USD23.1million for latest Financial Year.

Comair LtdComair Ltd has announced a significant improvement in its profitability for the 12-month period ending 30 June 2013. Revenue grew by 29% to ZAR5.38billion (USD537.46million) from ZAR4.16billion (USD415.96million) in 2012. As such, the airline declared a headline profit of ZAR231million (USD23.09million), a marked improvement on that of 2012 which totalled ZAR18 million.

In its presentation, the company , South Africa’s only private domestic airline operator, credited its success to the implementation of its 2 year-old strategy which addresses sustained higher operating costs that are driven mainly by the escalation of fuel prices and the ZAR/USD exchange rate. 

Among the new initiatives undertaken include a freeze on all non-critical costs, the implementation of a new enterprise system platform, and the delivery of four more fuel efficient Boeing 737-800 towards the end of 2012 replacing the fleet's ageing B737-400s.

Additionally, a new IT platform delivered "substantial" improvements in revenue integrity, inventory management and optimised ticket pricing, as well as improved productivity.

Collectively, these initiatives delivered a turnaround in earnings per share from ZAR0.016 (1.6c) in the comparative period, to ZAR0.47 (47c) for the year under review. The increase in turnover was mostly as a result of increased ticket prices in response to exchange rate related cost inflation, as well as improved inventory management.  The exit of the last remaining privately owned competitor airline, 1Time (T4), helped to restore seat occupancy to previous levels.

As a result of the increased traffic, cash generated was strong and resulted in a cash balance of ZAR778 million at year end. A gross cash dividend of ZAR0.10 cents per ordinary share was declared.

Said Comair CEO Erik Venter: 
Comair boss Erik Venter
Comair Ltd boss Erik Venter (EM)
The escalation of the dollar oil price since 2011 was exacerbated by the rapid devaluation of the rand against the dollar, impacting on the rand fuel price as well as various hard-currency based maintenance, lease and distribution system costs. The fuel efficiency of our new 737-800 aircraft, as well as the termination of some dollar-based leases on aircraft that they replaced, helped to marginally reduce exposure to the currency and fuel price.
The airline’s affiliated businesses of flight training, travel product distribution and airport lounges continued to perform well and in line with the prior year. Food Directions, its catering operation, launched in March 2012, has been successful in delivering substantial cost savings while improving the airline’s control over menu flexibility and quality.

Commenting on the year ahead, Venter said despite current industry challenges, Comair remained confident that recent capital investments had elevated the airline operator to a new level of efficiency.
2014 will be the first full year of operation for the new B737-800s, and we look forward to the delivery of the next four aircraft in late 2015 as well as potential further aircraft orders for delivery post 2018. Our much improved infrastructure as well as our reputation and ongoing focus on safety, customer service and efficiency have built a sustainable foundation to accommodate growth opportunities and ensure that Comair continues to play a major role in the Southern African aviation and travel industry,” he concluded.