Comair said its profits rose 54% and increase after tax to R297 million - up from the R193m recorded during the corresponding period last year.
The company said the increase generated yielding earnings a share of 63.7 cents, compared with the 41.5c recorded during the corresponding period last year, while headline earnings a share rose to 67c from 36.5c.
Chief executive Erik Venter said the results, including the strong performance of the non-airline operations, supported the airline's strategic focus. Venter said the weak economy and narrow profit margins in the airline industry had favoured the pursuit of growth from Comair’s non-airline businesses.
He said the strategy had yielded strong performance in travel businesses, including kulula holidays, the Comair Training Centre, the SLOW lounges and the Food Directions catering operation.
“All have performed well and justify further investment,” Venter said. “In the continued absence of meaningful gross domestic product growth in South Africa, our domestic airline-passenger market has yet to expand into its surplus-seat capacity, which constrains industry occupancy levels at below the global average. Average global seat occupancy is 80.6percent as per International Air Transport Association (Iata), while Comair has an average of 75percent.”
The private airline’s results are in stark contrast with troubled national airline SAA, which recently reported a loss of R734m this year.
Venter said despite inflationary pressure and a 5percent increase in the rand price of fuel, Comair costs remained well contained with a 1 percent increase overall.
He said cash generated from operations also increased 28%, resulting in a healthy cash balance of R935m at year end, compared with R1.12billion last year, after a significant investment of R132m in pre-delivery payments towards new aircraft for delivery in 2019. He said income generated by its non-airline brands now constituted 20% of its earnings.
The company declared a 21c dividend.
Javed Malik, chairperson of PAK Africa Aviation, said while Comair’s non-airline operations played a crucial role in the airline’s profit growth, it really did not have much to brag about.
Malik said the lack of new players in the local aviation industry worked significantly to assist Comair.
“There were no new entries this year and that worked to their advantage,” he said.
Comair shares closed 0.88 percent lower on the JSE yesterday at R5.60.