SA airline bucks global loss

Johannesburg - Air service company Comair announced on Tuesday that its diluted headline earnings per share for the year ended 30 June had lifted to 19.4 cents from 14.9 cents a year earlier.

The directors also resolved to declare a cash dividend of five cents per share from nil before.

Profit from operations was reported at R128.699m from R112.124m before.

The company said turnover growth of 13% was driven mainly by higher ticket prices in the first half, as a result of the high oil price at the time.

"The 27% growth in headline earnings per share is encouraging, but still short of our own targets for the business. Our strong balance sheet and excellent cash flow have continued to provide insulation during difficult times," it said.

"The fleet upgrade programme of the past few years has largely contained the impact of high jet fuel costs. We anticipate that with the recovery of the global economy, commodity prices will once again rise, and we are therefore proceeding with the next phase of our fleet replacement programme. After year end we announced our intention to upgrade our fleet to Next Generation Boeing 737-800 aircraft, which will contribute further to operational efficiency and environmental sustainability," said the company.

The International Air Transport Association (Iata) on Tuesday announced a revised global financial forecast predicting airline losses totalling $11bn in 2009, $2bn worse than previously projected.

The association attributes the revised loss to rising fuel prices and exceptionally weak yields. Industry revenues for the year are expected to fall by $80bn or 15%, to $455bn against 2008 levels.

Iata also revised its loss estimates for 2008 from a loss of $10.4bn to a loss of $16.8bn.

"The bottom line of this crisis - with combined 2008/09 losses at $27.8bn - is larger than the impact of 9/11," said Iata director general and CEO, Giovanni Bisignani. Industry losses for 2001/02 were $24.3bn.

- I-Net Bridge