Publications
Partners
Revenue grew to R2.688bn from R2.212bn, while operating expenses increased to R2.576bn from a previous R2.042bn.
Profit from operations shrank to R112.1m from R169.8m a year ago.
Due to the difficult trading environment, Comair has decided to maintain its cash reserves and has chosen to not pay a dividend. Last year it paid a dividend of 9c per share.
Describing the second half of the financial year as "the toughest in the history of the industry," Comair said the oil price reached levels that very few had predicted and now represents over half of the airline's costs.
In the past six months more than 30 airlines around the world ceased operations and the International Air Transport Association (IATA) has predicted that the global airline industry will lose over $6bn this calendar year.
"In these circumstances we did well to continue our proud record of 63 years of uninterrupted operating profits," the group said.
African progression
Earnings were severely impacted by the exceptionally high oil price, but top line growth was strong and increased by 21%, attributable to volume and yield growth on both its British Airways and kulula brands.
The earnings decline of 43% to R62m, was driven primarily by a R380m increase in its fuel bill.
Cash generation remained strong and allowed significant investment in Comair's new fleet, which delivered much-improved fuel efficiency.
Looking ahead, Comair said it has continued to grow its successful kulula services out of Lanseria Airport, where the ease and convenience of the experience has been very well accepted by business and leisure travellers.
"Our strong infrastructure and airline expertise has provided opportunities for us to commercially deploy these to the benefit of other African airlines.
The progression to Africa of the global trend to privatise loss-making national carriers, as well as our government's `Airlift strategy', to open up flight access in Southern Africa, has provided further scope for us to grow in Africa," it said.
High inflation, a slower economic growth rate and the credit crunch will impact on customer volumes, but this might be mitigated to some extent by the build up to the 2010 Soccer World Cup tournament, for which Comair says it is well-positioned.
"The efficiencies that we have achieved from our new fleet, and that we anticipate from our efficiency drive, will continue to strengthen our position in the industry, but could be offset by the crude oil price, rand/dollar exchange rate and uncompetitive behaviour of our state-owned competitors," it concluded.
- I-Net Bridge
