Comair posts profitable results despite tough airline industry

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Comair posts profitable results despite tough airline industry Comair is a British Airways franchisee and also operates under its brand. PHOTO: British Airways.

The Johannesburg Stock Exchange-listed aviation company implemented certain improvements in 2011 to combat prevailing market weakness and operating costs, which included introducing a new enterprise system platform.  

“While some of the cost cutting from the first phase was not sustainable, there also emerged improved processes which are providing on-going benefit. The new Sabre platform has delivered substantial improvements in revenue integrity, inventory management and optimised ticket pricing, as well as improved productivity,” the group said in a statement.

“We see further opportunities for better customer service and revenue growth from the on-going enhancements to the systems.”

[DATA COM:Comair] recorded an increase in group revenue from 4.1 billion rand for the year ended 30 June 2012 to 5.3 billion rand for the year ended 30 June 2013.  

Airline revenue increased to 5.2 billion rand for the period ended 30 June 2013 from the previous comparative year’s 4 billion rand. Non-airline revenue was recorded at 154.3 million rand from the previous year’s 86.9 million rand.      

The group however explained that the recent demise of local competitors had significantly damaged the reputation of the industry.

Low-cost carriers 1time, Nationwide and Velvet Sky have been among the airlines that ceased operations between 2008 and 2012. 1time however…

Turnover increased by 29 per cent, as result of increased ticket prices. The exit of the last remaining privately owned competitor airline also helped to restore seat occupancy to prior year levels.

The domestic airline industry however remains a challenge, as the average ticket price has only increased by 14 per since 2001, and operating costs have increased by 163 per cent.  

The delivery of four new Boeing 737-800 aircraft towards the end of the 2012 calendar year also proved successful for the group. This added to the turnaround in earnings per share from 1.6 cents in 2012 to 47 cents in 2013.

Operating expenses however increased from 3.9 billion rand to 4.7 billion rand. A gross cash dividend of 10 cents per ordinary share was declared.

The Comair fleet, which includes British Airways and low-cost airline Kulula, offers flights to Mauritius, Mozambique, Namibia, Zambia, Zimbabwe and South Africa.

The aviation company is also an affiliated member of Oneworld, one of three of the world’s largest global airline alliances.  

“We remain cautious regarding the strength of the domestic market, particularly in light of the relatively weak GDP growth forecasts,” the group said.

“Although the aviation industry continues to face obstacles, we remain confident that the recent capital investments have elevated the Group to a new level of efficiency.”