Despite soaring costs and shrinking domestic passenger numbers, privately owned airline Comair lifted revenue by 23 percent in the first half of its financial year.
Revenue in the six months to December last year rose to R2.96 billion and headline earnings a share more than doubled to 34.3c from 16.4c a year earlier.
Comair, which is a franchise holder of British Airways, ended the six months with “a healthy cash balance of R695 million”, despite a 14 percent escalation in the price of jet fuel and the fact that maintenance costs are also priced in dollars. The fall in the rand against the dollar was countered by higher ticket prices.
Chief executive Erik Venter said the higher cash balance was due mainly to a 15 percent increase in capacity achieved by replacing its Boeing 737 300s with larger, more fuel-efficient Boeing 737 800s.
The airline was also helped by the record number of foreign business travellers and tourists. But the total number of passengers on domestic flights during the six months was about 5 percent lower than in the previous year.
A restriction on the number of flights it was allowed to operate on the Johannesburg-Maputo route had caused Comair’s full-service airline to withdraw the service. It could not compete with the more frequent flights offered by SAA and the Mozambican national airline, LAM.
Venter said that not only were the costs of flying into many African countries high, restrictions on the number of flights they could operate discouraged privately owned South African airlines from enlarging their route networks in the continent. But Comair was now in discussions with some African airlines that could lead to partnership arrangements, making a move into the rest of Africa profitable. There was high demand for flights into Francophone Africa, but standards of safety at airports were low.
Venter had started preparations for a court action against SAA in protest against the national airline being granted a two-year government-guaranteed loan. His complaint is on the grounds that it gave the national airline an unfair advantage against privately owned airlines, which were compelled to help subsidise it.
He said the action had been put back to a later date in view of a recent decision to grant more cash for a longer period to SAA, which, he claimed, made it obvious that “the loan will never be repaid”.
Comair shares soared 5percent to close at R3.78.