Clouds clearing as Comair posts small profit

Audrey D’Angelo

Cost cutting and the acquisition of some new generation fuel-efficient aircraft helped Comair end the year to June with “a small but noteworthy” headline profit of R18 million, compared with R70m the previous year.

In a tough year for the aviation industry worldwide, in which soaring fuel costs and taxes forced some previously successful international and domestic airlines out of business, Comair grew its revenue by 16 percent to R4.16 billion. But no dividend will be paid.

Chief executive Erik Venter said yesterday that both its full-service airline, British Airways/Comair and low-cost division kulula.com were performing well, with about 50 percent of kulula passengers and 65 percent of those on the full-service airline travelling on business.

An increase in passenger demand after a fall at the beginning of the year had enabled ticket prices to rise by an average of 14 percent to help meet higher costs.

Cost cutting had enabled the airline to save about R80m over a full year. The most effective saving had been to introduce in-house catering, which had reduced the cost of inboard meals by 25 percent per passenger while, at the same time, surveys showed the change had increased satisfaction.

“Some of our passengers fly two or three times a week and we can change the menus frequently and replace the less popular ones very quickly,” the company said.

Some of Comair’s revenue comes from a training centre for flying the increasingly popular French-made ATR propeller planes, which are cheaper to buy and operate on short-haul routes than jet aircraft. Venter said the training centre was “extremely busy” and the company was considering buying more simulators to meet demand.

Comair itself does not operate ATRs but provides training facilities used by pilots from other airlines. It is attracting large numbers of trainee pilots from China and the Middle East in particular.

Savings have also been made on hotel accommodation by encouraging some air crew to live in Cape Town rather than in Johannesburg so that they were in the right place for early morning flights.

Discussing the acquisition of its new aircraft, Venter said it was intended to replace the entire kulula.com fleet with new generation planes by the end of this year.

Commenting on the year ahead, he said: “We are still somewhat cautious as to the state of the global and South African economies and we expect consumers to remain under pressure for the foreseeable future.

“But we remain confident that our focus on safety, customer service and efficiency has built a sustainable foundation that will allow us to take advantage of growth opportunities as they arise.

“We anticipate that our financial performance in the coming year will be an improvement on the results of the past challenging year.”

Comair regularly investigated the possibility of more cross-border routes but, Venter said, it had not yet found any attractive prospects. He thought most of the expansion of SAA’s routes into Africa was motivated by political rather than financial considerations.

Comair shares closed 3.85 percent lower at R1.25.