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Johannesburg - There is going to be pressure on passenger numbers amid anaemic GDP growth, but Comair Limited [JSE:COM] has new plans to keep flying high, CEO Erik Venter told Fin24.
“There are always new efficiencies we can bring in,” he said in a video interview, hinting at a new initiative that will be announced soon.
“We have a little release coming out fairly soon about a new development on our aircraft, which will improve fuel consumption even further.”
The private domestic airline operator, which operates under its low-fare airline brand, kulula.com, posted on Tuesday a 17% revenue jump for the year ended June 30 2014.
Revenue grew to R6.28bn from R5.38bn compared to the previous year, while total comprehensive income increased by 16% to R265m.
Headline earnings per share grew to 57.8 cents from 47.9 cents last year. Venter said this figure was enhanced by the group’s 10% share buyback in November and December of last year.
He said because of the current performance and the cash available, Comair declared a final gross cash dividend of 13 cents per ordinary share. “On a dividend per share basis, it actually went up by 20%, again benefitting from the lower number of shares in the market due to the buyback”.
The airline also made significant cost savings on its fuel bill and maintenance owing to its new fleet, said Venter, adding that Comair’s cash has gone up quite significantly.
“We are sitting on quite a good cash stockpile at the moment, but in this industry with cyclicality, we do like to have a reasonably good cash reserve available.”
However, he said that the margins are still fairly tight as the airline is only looking at R51 profit per passenger.
Watch: Comair makes R51 profit per passenger - CEO
"If you took the same value in cash of your average airline ticket to your bank and you gave them your money, they'd probably charge you R51 just to deposit it. And for the same R51 we will take you all the way to Cape Town or Johannesburg".
He said despite a tough industry with the market declining by about 4% and the average seat occupancy dropping by 5% this year, Comair still recorded a 3% growth in passengers.
“I think the retention of passengers in a declining market has largely been attributable to the amount of effort that our staff has been putting into customer service.” Venter said great effort has been put into marketing, social media and responding quickly to customer issues.
Despite anticipating a challenging year ahead, Comair is set to keep this momentum going.
"Globally we have seen that passenger numbers grow at about 2.5 times GDP, so in the absence of substantial GDP growth, there is going to be pressure on passenger numbers, but we have got new tricks up our sleeves,” said Venter.
- Fin24
