Comair reports loss, shares down

Johannesburg - Comair [JSE:COM] fell more than 3% after the airline posted a headline loss per share of 4.9 cents for the six months to end-December, from earnings of 10.3 cents per share a year earlier.

The carrier said high fuel prices, a weak economic environment and an increase in airport tariffs constrained room to increase fares.

Comair shares were down 3.13% at R1.55, compared with a 0.06% fall in the JSE's All-Share index.

No interim dividend was declared as it is the group's policy to consider one dividend annually.

Revenue grew by 17% to R2.05bn mainly as a result of higher fleet utilisation and the larger Boeing 737-800 aircraft introduced last year, but costs increased by 24%, driven by higher fuel prices.

The company said that during the period, a R10.7m loss was incurred on the disposal of three Boeing 737-200 aircraft that were retired from operation in early 2011. Cash generated by operations remained strong, and R106m was reinvested in heavy maintenance on aircraft and in an enterprise system from Sabre Airline Solutions.

The company said it remained of the opinion that the high oil price and a weak global economy will prevail for the foreseeable future.

"Airlines that do not substantially reinvent themselves will not survive in this new environment, as demonstrated by the failure of a number of airlines globally in the first weeks of 2012," Comair warned.

The group has embarked on a cost reduction programme, but this is not a sustainable solution to mitigate escalating costs.

"We therefore contracted a year ago for an extensive and integrated suite of systems from Sabre Airline Solutions, which will enable the re-engineering of the entire Comair business to deliver substantially improved customer service, revenue and operating efficiency.

"The benefits of the new systems will only be seen in the results for the 2013 financial year," it said.