Johannesburg - Comair issued an announcement this week to alert investors about an acquisition that it is presently negotiating, which would have a significant impact on its structure. Low-cost carrier FlySafair has confirmed that the airline is not part of the acquisition.
“We are unequivocally not for sale at this stage,” confirmed Vice-President of Sales and Distribution Kirby Gordon. “In fact, we’re looking to buy in order to expand.”
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In his Budget Speech earlier this year, Finance Minister Pravin Gordhan announced the government’s intention to sell off a minority share in a combined entity of South African Airways and SA Express. Speculation is rife around what the Comair acquisition is.
Following the minister’s speech, FlySafair issued a letter to the ministry stating that it had no particular interest in investing in the SAA/SA Express entity, but would gladly purchase low-cost carrier Mango, if the government was interested in divesting of its airline asset.
What an acquisition means for domestic aviation
FlySafair was excited about the news of this acquisition. “Regardless of what the acquisition is, this investment signifies good things for the domestic aviation and tourism space,” says Gordon. He explained that domestic aviation in South Africa has been experiencing a significant growth spurt over the past 18 months. FlySafair’s introduction of low fares has decreased fares on some routes by up to 39%, resulting in an overall growth rate of about 9%, according to industry analysts.
Acsa numbers for the festive period echoed these sentiments. They indicate significant growth numbers, particularly in the coastal regions, with the number of passengers passing through the George Airport, for example, having increased by approximately 40% year on year.
“Having a listed entity like Comair recognise the business case for investment in our industry is an excellent sign for us all,” said Gordon.
What is Comair buying?
The burning question remains “What exactly is Comair buying?” Industry experts say it’s unlikely to be one of the other two major low-cost carriers, as a deal of that nature would need to be cleared by the Competition Commission, which would result in the names of the two parties being published publicly.
According to Gordon, Comair has recently indicated strategic intent to invest more deeply into the travel vertical, so the acquisition could be anything from a technical division, a ground-handling company or even another airport lounge.
* Adapted from a press release
IOL