OWN CORRESPONDENT, Johannesburg | Monday 10.50am
THE domestic airline price war which saw Sun Air throw in the towel last week apparently had little impact on Comair’s financial results.
The airline has continued its unbroken record of profit growth, increasing headline earnings per share by 40% from 15c to 21c/share in the financial year to end-June. Attributable profit rose 28% from R600-million to R76,6-million, while attributable earnings per share improved 21% from 15c to 18,2c.
Comair MD Piet van der Hoven says the price war initiated by South African Airways, with reduced fares and seats added to domestic flights, affected Comair’s returns per passenger. But pressure on profit margins was offset by an appreciable increase in the number of passengers conveyed. Though Comair increased the available seats on its routes by only 9% in the financial year, passenger numbers improved 15%.
Turnover was up 19% and so was the operating profit of R91,2-million. The tough economy led to more passengers travelling economy class than previously. Van der Hoven expects Sun Air’s liquidation to relieve pressure on margins and Comair has already added flights to Durban to fill gaps left by Sun Air’s demise.
He thinks it highly unlikely that Sun Air can be saved, since a major capital injection would be required.
Safair, from which Sun Air hired aircraft, is looking for alternative users, while Comair has written off R11,5-million it invested in Sun Air. Van der Hoven is optimistic about prospects for the new year in view of the envisaged improvement in the economy and Government’s commitment to make more money available for marketing SA as a tourist destination.
No extraordinary capital expenditure is projected for the coming financial year. –Reuters