The acquisition of new generation aircraft using less fuel, improvements in operating efficiency and a switch to in-house catering helped Comair to post a profit for the six months to December last year despite a 6 percent fall in the total domestic passenger market.
Headline earnings a share came in at 16.4c compared with a loss of 4.9c in the corresponding period of 2011, the airline said yesterday. Cash generated by operations rose to R262 million from R161m, helped by strong advance ticket sales during the December holiday period together with tax allowances on the new fleet, resulting in a cash balance of R529m at the end of December.
Comair declared an interim dividend of 5c a share.
Revenue grew by 20 percent to R2.41 billion, due partly to the fuel surcharge added to tickets on full service airline Comair’s British Airways franchise service and to a new inventory management system for kulula.com. The low-cost division’s four new, larger Boeing 737 aircraft contributed to increased revenue by carrying more passengers even while improving fuel efficiency.
Chief executive Erik Venter said he was particularly proud of the fact that profitability had been improved without any retrenchment of staff “largely as a result of their own commitment to implementing the changes required to turn the business around”.
Venter said he expected further improvements in cash generation in the coming six months, although there was unlikely to be any increase in local consumer spending and market volumes would be flat.
Ticket prices would remain at present levels to recover the escalating costs resulting from the devalued rand, which affected the fuel price and dollar-based technical services.
But more revenue would be generated by a new kulula service from OR Tambo International Airport to East London starting on March 1, and flights from the Johannesburg airport to Maputo starting in May.
The shares lost 0.53 percent to close at R1.89 yesterday.