1Time off to flying JSE start

Sikonathi Mantshantsha

Johannesburg - Low-cost airline 1Time were off to a flying start on the JSE's AltX on Tuesday, as nearly 4m shares changed hands in the first four hours of trading.

The shares reached a high of 119c - a 19% premium to the private placement price of 100c/share.

But the share flight seemed to be coming closer to landing as the morning progressed, when the share hit a low of 102c before regaining speed to trade at 109c/share at the time of writing.

The shares were 10 times oversubscribed in a private placement of 60 million shares late in July. "It's very clear that investors have great confidence in our business and see long-term growth and opportunity," says Glenn Orsmond, CEO of 1Time Holdings.

OR Tambo charters

1Time Holdings Limited is the holding company of 1Time Airline, 1Time Charters and Aeronexus Technical.

It said in a statement after the listing that it was looking forward to a "bull trend" and seeing its share price and index levels consistently rising on the stock market. 1Time Charters plans to create an arrival and departure facility at the OR Tambo International Airport for the convenience of passengers in the "very near future".

1Time's listing on the JSE makes it the second airline company to go public after Comair. Comair operates South Africa's biggest low-cost airline, kulula, and it also holds the British Airways franchise in South Africa.

Started in February 2004, 1Time is a sixth of the size of Comair (R1.2bn market capitalisation at 300c/share) at just over R220m market capitalisation.

Passenger numbers expected to grow

According to an aviation expert who declined to be named, the listing of another private airline company signifies the "growth and vibrancy" of the domestic airline market, which has achieved a growth rate of over 70% over the past five years.

However, at approximately 12.5m passengers a year, it is estimated that less than 10% of the population travel by air. 1Time said it was confident of a 20% increase in passenger numbers in 2007.

1Time's listing came a few weeks after Comair announced that it was expecting its profits for the past financial year to be up to 40% higher than the previous year.

That was despite the stiff, if unfair, competition launched by state-owned South African Airways (SAA) last year through its wholly owned venture Mango. Mango launched in November with great fanfare promising the cheapest of air tickets - a promise that it has largely kept.

Said Mango CE Nico Bezuidenhout on the occasion of his company's first half-year of operations in July: "There's no doubt that Mango has driven aviation prices down. Since the airline's launch, domestic airfares have declined by an average of 10% - making air travel more affordable to all South Africans." This has been accompanied by losses (which are not new) at SAA.

Where does that leave independent operators like 1Time?

Glenn Orsmond is not worried by the competition. He told Finweek in July: "The three state-owned airlines (SAA, Mango and SA Express) - which are also subsidised - have been and are still making losses, while the five privately owned one - 1Time, kulula, British Airways, Nationwide and Airlink - have been and still are profitable. We have always been profitable and we'll always be profitable."

- Fin24