Mango sustainability in SA airline arena

[Rotates Lowly]

Be sure to watch Carte Blanche on M-net this evening (2 November 2008) at 19h00. Comair executive management reportedly has insight into the creative (SAA) accounting system on which Mango has been able to operate at lower cost than other self-funded private airlines in SA. It should make for interesting viewing.

[i-Robot]

Its exactly the same method used by Comair with Kulula on their books.

[Doodlebug2]

..or any other SA Government department!!

[Setron]

SAA II Date:02-11-2008Producer: Esté de KlerkPresenter:Derek WattsGenre: Business and Financialhttp://www.mnet.co.za/Mnet/Shows/ShowImages/carteblanche/bg_artInfo_bot.pngOver the past decade losing billions has become a trend for South Africa's national carrier, SAA.

In June this year, as a worldwide oil shortage precipitated a drop in the markets, SAA hedged to try to prevent a financial disaster. But this only made matters worse.

In August, when Carte Blanche exposed gross financial mismanagement at SAA, CEO Khaya Ngqula denied it.

[Carte Blanche August 2008] Khaya Ncqula (SAA - CEO): "I would say that is fiction, there's a lot of fiction and fantasy from people."

Bongani Bingwa (Carte Blanche presenter): "In the past two years government has handed over R2.8-billion to SAA. In July this year the begging bowl was out again - this time, for an additional R2.9-billion. The grand total - R5.7-billion."

[Carte Blanche August 2008] Khaya: "This figure of R5.7-billion, I don't know where people get it from."

[Carte Blanche August 2008] Gidon Novick (CEO - Kulula): "Over the last five years we saw R15-billion going into those airlines, and we're talking now about, on the table, R5.7-billion that has been requested to subsidise and support SAA, SA Express and Mango."

Bongani: "As SAA's major shareholder, government has a vested interest in keeping the airline afloat. Call it loans, capital investments or bail-outs, no matter how badly it performs, our national carrier is guaranteed money that ultimately comes from the taxpayers' pocket."

[Carte Blanche August 2008] Khaya: "And that's the fact of the matter, the airline is owned by the government, the government is a shareholder, whether it is the taxpayer or the government is up to you."

SAA has cut about 2 000 jobs since last year. This after consultants Seabury told them to cut staff from 11 000 to 7 000. But selected staff are being paid top salaries and are getting so-called "retention bonuses".

[Carte Blanche August 2008] Khaya: "It's rubbish."

[Carte Blanche August 2008] Bongani: "That's absolutely not true?"

[Carte Blanche August 2008] Khaya: "Bull****... rubbish."

Many believe it's time to sell

[Carte Blanche August 2008] Glen Orsmond (CEO - 1Time): "I've heard it being called a strategic asset, I think in this case it's more a strategic liability."

[Carte Blanche August 2008] Khaya: "This airline is in great shape, it's doing well."

But former employees and insiders confirm that it's definitely not in great shape and say that abuse of power, victimisation and intimidation at SAA have become untenable. After our last programme, six employees were suspended for leaking information and speaking to Carte Blanche. In fact, none of them had spoken to us.




Now, three independent sources have confirmed to us that once again, taxpayers are coughing up millions. By the end of October, SAA had lost more than R400-million because they hedged at the highest crude oil price the world has ever seen - 140 US dollars a barrel.

Our sources told us that SAA took a decision to hedge at this price from July until the end of December. So for six months, they're paying $140 a barrel, while the price of crude oil is currently between $60 and $70 barrel.

Gidon: "You and I once again are going to be called upon to cough in like we have been in the past. Like we have been over the rand-hedge going back years again - which cost us R6-billion or R7-billion - we coughed in there. We just keep coughing as South African taxpayers at the decisions that are made by government-owned airlines."

Gidon Novick, CEO of Kulula, says to hedge is always a risk and it needs to be done conservatively.

Gidon: "You can work it out, if it is in the sixties, that effectively means they are paying more than double for their fuel than what they could be paying at the current rate."

Derek: "You think that the man at the controls of a national airline that sucks up billions from the state coffers would want to put his side of the story, but all that we got was a tersely worded e-mail: 'The CEO is not available for an interview with Carte Blanche.'"

Over the past six years SAA has lost a staggering R13.74-billion. David Gleason, an independent financial journalist, says it's shocking what taxpayers are forking out to keep the ailing airline afloat.

David Gleason (Financial journalist): "If you assume that we got eight million taxpayers and you divide that out, it means that every taxpayer in this country has contributed R1700 to R2000 to keeping SAA and its aircrafts in the skies. In these times there's no justification for us having to pay this kind of money out of taxpayers' pockets to fly the South African flag on the back end of an aircraft.

Rushj Lehutso is the former general manager of Commercial Operations at SAA. He was appointed in June 2006 to oversee revenue and fleet planning. He also occasionally acted in place of CEO. But in February, he was suddenly suspended, only two months after signing a 3-year retention bonus contract.

Derek: "Rushj, it seemed to start with this letter from Khaya, your employment with SAA, what was this about?"

Rushj Lehutso (Former SAA General Manager): "Derek, that was one of the most shocking letters I have received from the CEO. In that letter he says that the board and I are concerned about your performance and I found that extremely, extremely strange and I said, 'What are you talking about, because my performance speaks for itself.'"


Under Rushj's management, SAA actually began showing revenue growth. Rushj and his team met and overtook their set target by more than R700-million. In response to the CEO's letter, Rushj issued a detailed explanation to the SAA Board.

Rushj: "I copied every member of the board and I also raised some of the governance issues that are not right at SAA. Now, if you raise issues pertaining to governance, like remuneration, which is in line of, 'I like your face, I will give you more, I don't like your face, I will give you less.' Issues that pertained to that kind of nature, you would expect the board as the custodian of all matters that involve governance to take notice or respond to that."



Derek: "But the board never responds. What Rushj gets instead, is a notice of suspension, ordering him to hand in his laptop, his phone... even the office keys."

Suddenly, the reasons for his suspension were no longer poor performance, but misconduct. He alleges that SAA were determined to get rid of him by asking an employee to fabricate allegations against him. This source spoke to us anonymously.

Former co-worker: "I was approached by a senior person. He proceeded to ask me if I would consider laying a sexual harassment case and I asked him, 'You are saying that you are wanting me to fabricate information against the general manager that you people have suspended?' And yes, that was the implication, well, he was implying that."

SAA branded Rushj as a sex pest, which he says has ruined his professional track record.

Rushj: "The following morning when I woke up they had released a statement on 702 that I've been suspended because of having consensual sex with subordinates. Which I really, I was taken aback, what are you talking about. Suffice to say I took the matter to the lawyers, they took four weeks to deliver the charges, and the charges were indeed very frivolous."

There were five charges - one of them was that he'd had an improper relationship with SAA's head of Sales and Marketing, Carla da Silva.

She strongly denies it.

Derek: "Was there any proof?"

Rushj: "What they did, we found out at the hearing that they have set us up. The CEO on the 8th of January sent me an sms telling me about trouble in the Cape Town office, and send the same sms to Carla, so we agreed let's go and sort out this problem. He had some sleazy investigators who followed us, got into the plane with us, followed every step in Cape Town, we went to the office, they stayed outside, and they came up with photos, one photo of the car and one photo of Carla and I having lunch."

Derek: "What sort of relationship did you have with her?"

Rushj: "I had a professional relationship. She was my direct report."

Derek: "There was a full disciplinary hearing in June of this year. It takes five days and fills 23 pages and finds absolutely no evidence of misconduct. SAA don't flinch, they say we don't agree with the findings, Rushj remains suspended."

His second disciplinary hearing was due in September. SAA's lawyers phoned him to say it would be postponed, but the very next day he was fired.

Derek: "So you feel that you have been followed at times, that they are spying on you?"

Rushj: "I've had cars outside my house, as you can imagine, you don't want any harm to come to your family. I've got children - that is very, very scary. I have confronted people parked outside and they drove off in high speed. This is the kind of things that I have been subjected to. I wish I could just understand what it is that they are looking for. It is not worth putting my family through all this."

He's without a job now and wants his name cleared. And he feels the truth about SAA should be heard.

In August Carte Blanche asked the CEO why, when he makes a salary of more than R5-million a year, he needs a retention bonus until his contract expires in 2010. He denied getting a monthly bonus, saying it was a once-off payment.


[Carte Blanche August 2008] Khaya: "It's rubbish."

[Carte Blanche August 2008] Bongani: "That's absolutely not true?"

[Carte Blanche August 2008] Khaya: "Bull****... rubbish."

The audited annual financial report shows that CEO Khaya Ngqula has received a retention premium of R688 000 in the 2007 financial year, ending in March 2008.

Also in the annual report are details of the financial woes of SAA's low cost carrier Mango, launched two years ago.

Competitors like Kulula say it's frustrating that separate financial results for this government owned entity have never been released.

Gidon: "The question to ask is why don't you just show us your financials, why don't just show us your results? We're taxpayers - we're a competitor - but we're also a taxpayer. And we pay our taxes. And we have the right to know if government has taken our money, your and my money, and put it into a new entity which was formed two years ago and that entity has lost hundreds of millions of rand, don't we have the right to know about that?"

Mango has cost the taxpayer R62-million in losses in the past 16 months. But it's actually cost much more if the cost of the shares, at R336-million, are taken into account.

David: "That's the value of the equity in the company, Mango, to which you must add the loss, so the total cost to taxpayers looks just short of R400-million. One of the interesting things that has happened here is that the directors of SAA have now increased the value that they apply to Mango, which up to now has been loss making from the R336- to R495-million. Now, that pretty unusual, in fact it's extraordinary."

Derek: "How can an airline lose that much money?"

Gidon: "Derek, it's a good question. I think if we tried to lose R400-million, I don't think we could, certainly not in 16 months. Kulula was profitable from day one."

And again - no explanation for the losses from SAA, or Mango.

Derek: "The man who should know the nitty gritty of Mango's financial results is their boss, Nico Bezuidenhout. At first we were told that he was willing to speak to us, and all of a sudden, he wasn't available at all."

At the time of Mango's launch, Kulula estimated it would cost taxpayers over R3-million a week to keep Mango in the sky.

Gidon: "I think we were hopelessly wrong, because I think we under-estimated the extent of what it is costing SA taxpayers. We also worked out that it was costing about R27 000 for every Mango flight that took off."

David: "I mean the logical answer to this whole thing is possibly Mango might make it on its own, so take it away from SAA and let it stand on its own."

Also logical, say those who once worked there, is a change of management.

Rushj: "You need a drastic change in mentality, in capability. Unfortunately, the leadership that SAA has currently leaves a lot to be desired."

[Plore]

Being an ex SAA employee the only lies, rubbish and bull**** I see in this report are those uttered by Khaya.

Brace yourselves taxpayers, its gonna be a bumpy ride.

[777Contrail]

i-RobotIts exactly the same method used by Comair with Kulula on their books.



So you're saying Kulula is making a loss of 5mil per week and the taxpayer is covering the loss by handing Comair the difference?!

Have you got ANY idea what you're talking about?

[LittleMo]

I Robot: what are you on about?

Comair holds the BA franchise and owns Kulula.com in it's entireity. Since 1946 Comair has not made a loss therefore it can't be hiding losses cuz there are none. As a listed company it also publishes financial results every year for the public record. In these financial statements there are fugures for Kulula as well as the BA brand. If kulula was losing 400mil a year like Mango we'd know about it.

Apart from that, because Comair has no access to the government purse, it would have folded years ago if it was making huge losses like Mango does, regardless of if they were hidden or not.

:ugh:

[VAFFPAX]

Pardon my saying so, but F-Me! Carte Blanche still rocks after all those years. I am shocked at SAA, but then again, I shouldn't be surprised. I think that's made up my mind as to how things will be going in July 2009.

I don't give business to organisations that treat their staff that way.

S.

[balloo1279]

Does not bode well for those who put their hand to the plough and look after SAA's pax or cgo as if their income depends on it.

Before we all scatter for the mountains, I hope that the esteemed people at the helm of the board get a chance to decipher the writing on the wall, and fix it. Cut worthless routes and stop spending other people's money.

Why import overseas consultants when we have South Aficans who can do the job a lot better and eficiently than Seabury or other fine foreign orgnisations.


As a youngster always flew SAA to Europe (around the bulge nogal). Super B or SP, 14 hours n/s to Frankfurt. SAA was a mark above the rest. But then again this was in the heyday of nationalised aviation and SAS&H had plenty of dosh.

Privatisation of SAA is now becooming an urgent item. No golden parachutes, retainers and bail outs, just results delivered by competent people within the organisation.

[TL3B]

Heard from a friend of mine that the bunch at mango received a 10% increase an they did make a loss.who bailed them out again......

[DropTheDunlops]

An official response by SAA:


A Message from the Chief Executive
7 November 2008
Dear Valued SAA Employee,
SAA’s Future Growth Plans, and Getting the Facts Right
This week, SAA held its Corporate Planning Conference, aimed at plotting a path forward for the airline.
As you know, our deep and fundamental restructuring programme comes to an end in March 2009. While we need to remain vigilant about ensuring that we keep costs firmly under control, particularly in this turbulent economic environment, the time has come to start planning for our future.
Our focus for growth remains firmly on Africa in line with the vision of being an African airline with global reach. Apart from increasing frequencies on existing routes and opening new routes where opportunities exist, we are investigating strategic partnerships on the continent.

Internationally, we will continue to concentrate on the major gateways into each continent, with strong support from Star Alliance partners for feeder traffic. We will build on existing networks in North and South America, Europe and Asia. Domestically, we are working to strengthen our partnerships and will continue to focus on the Golden Triangle of Johannesburg, Cape Town and Durban.

In addressing the conference this week, I made it clear that if we hope to achieve our future goals, we need to ensure that we continue to improve efficiencies, keep costs under control, streamline the business and ensure that we are all accountable for keeping within our budgets. For the coming five months, the emphasis on improving our customer service, our operational performance and our revenue management will continue. This is a critical element of our restructuring programme.

But for now, we are able to look ahead with hope because of the hard work and dedication of all our employees. There was a time not so long ago when we feared for our survival. Today, thanks to your efforts, we are planning for our future. SAA has emerged as one of the Top 20 airlines in the world, and we are determined to stay there.
Getting the Facts Right
It is also important to put the facts straight, particularly in light of the misleading comments made by our competitors, amongst others, on the recent Carte Blanche programme:
Mango
Mango has done very well, and it is on track to achieve its business plan goals. Mango recently carried its 2, 5-millionth passenger and its lean cost structure means it’s well positioned to withstand any shocks to the system, including the volatility of the oil price.
The claimed loss of R400-million is completely incorrect. The facts are that SAA invested a total of R336-million as share capital in Mango. So, for example, it’s like buying a house – the cost of the house is an investment and not a loss.
In fact, during its first full year of operation in 2007/08, Mango made a loss of just R1-million. This is an incredible performance, particularly in light of the fiercely competitive environment within which Mango operates.
Mango has become a well recognised brand in just two years of operating, and its business is going from strength to strength. Congratulations to Nico Bezuidenhout and his team for their perseverance and determination during difficult times.

Hedging

Along with airlines around the world, SAA does have a hedging policy in place which acts as an “insurance policy” against the volatility of the fuel price. It is too early to talk about profits or losses on hedging because the situation changes all the time, and we will only have a clear picture at the end of the current financial year.

However, it is important to note that SAA is conservative in its approach to jet fuel hedging, with the approved target range being between 40% and 80% of our forecast uplift volume over a 12 month rolling period. We are now within the lower end of this target range.

The hedges are managed against the policy parameters, and are reported to the Chief Financial Officer and the Chief Risk Officer every day. The risks are also monitored daily and reported on daily. The Financial Risk Sub Committee meets every two weeks and the Forex and Jet Fuel hedges are discussed at these meetings. The Board’s Financial Risk Investment Committee is also appraised monthly.

Recapitalisation

Again, there have been many misleading statements about this in recent months. The fact is that we have received a total of R653-million in cash from the fiscus since 2005/06. This was ring-fenced and allocated only for Voluntary Severance Packages under the restructuring programme. Government has issued guarantees totalling R2, 86-billion during this period, against which SAA raised funding in the financial markets on which we pay interest. We are asking government to convert the guarantees into equity in order to strengthen our balance sheet and allow us to grow into the future.

Rushj Lehutso

Former SAA commercial General Manager, Rushj Lehutso, was dismissed from SAA on 12 September 2008 after repeatedly failing to appear before a second disciplinary hearing to answer charges of financial mismanagement and improper conduct. Mr Lehutso made an urgent application to the High Court asking for his dismissal to be declared invalid. The court dismissed this application with costs on an attorney and client scale. Mr Lehutso has referred the dispute to the CCMA where a hearing on the matter is pending.

Financial Results

There are many wild and inaccurate figures about our financial results, ranging between losses of R20-billion and R15-billion, in recent years. It is no secret that SAA lost money in 2002 and 2003 as a result of the hedging losses. The total loss for these two years was R14, 5-billion.

However, since 2004, there has been a significant improvement in our financial health. We made a loss in only one year and that was in 2006/07 when the loss of R883-million made it clear that we needed to fundamentally restructure. So in 2007 we launched the restructuring and this has been highly successful. We reduced costs by R1-billion in 2007/08 and made a profit of R123-million (excluding restructuring costs) that year.

SAA has a great future ahead of it, and I would like to thank each and every one of you for building our airline into one of the top airlines in the world. Together, we will go from strength to strength.
Regards
Khaya

[Shrike200]

I've summarised it for those that couldn't be arsed to read it:

We had a Corporate Planning Conference (it's important, note the capital letters!) We're looking at African routes.

We're looking at other routes with partners.

You're all hard workers, pat yourselves on the back. We're in the top 20 of some imaginary list of airlines, because I said so. Mango didn't lose as much money as everybody thinks.

We hedged, but we don't know how much we lost by doing it so badly yet.

Government gave us several more billions.

We're carrying on trying to discredit Rushj Lehutso. He's carrying on trying to oppose that.

We lost a sh1tload of cash...but thanks for building us into one of the top airlines of the world. Together we will continue to milk the SA taxpayer dry!

Thanks suckers,

-Khaya


I can summarise a little more though:

Blah.

Blah, blah.

Blah.

-Thanks, Khaya

[flux]

Was Watts not offloaded from an SAA flight a couple of years ago? But I am sure you as a tax payer, is probably paying someones sallary at airways shrike? I cant remember who posted it but there was a breakdown of how much SAA costs (In the region of R160 per year) individual tapayers in SA. This is not nearly as unuasual as you think. In Europe and the rest of the civilised world, there are routes (on tender) that are subsidised by goverments. What do you think Gautrain is costing? Being a totally indipendend public entity. I don't think for a minute that SAA is the be all, but I do think that there is an Agenda with all you hard working taxpayers! Must be tough being that bitter.

[boypilot]

I guess two chips are always better than one: one for SAA and one for Mango i.e one for each shoulder - you will find it much easier to walk upright in a stiff breeze : Top tip for the week: Build a bridge and get over it !!!:ok:

[Q4NVS]

Real possibility that another 737-800 will soon be added to the Mango Fleet...

Wonder how the Novick's will respond to that :ouch:

[dikkes]

Possibly this?

file:///C:/DOCUME%7E1/ADMINI%7E1/LOCALS%7E1/Temp/msohtml1/01/clip_image002.jpg
Hi everyone…

The political scene in South Africa is hotting up with the ANC breakaway party now committed to contesting the next election. It is still not clear how much support the new party, headed in part by Mosiuoa Lekota and Mbhazima Shilowa, will attract. Several of the other opposition parties have welcomed the new party and indicated that they are likely to form a coalition after the 2009 elections. These developments have altered the political landscape in our country and it will be an interesting and hopefully stable few months in the build up to our 4th democratic election.

Last week we were able to arrange a short meeting with ANC President Jacob Zuma to brief him on the state of the airline industry in our country. In the meeting we made the point that continued subsidisation of SAA/Mango would not only be a huge burden on South African taxpayers but would also threaten the future of the private airline industry in our country. (Carte Blanche uncovered a massive R400 million Mango loss on Sunday night.) Jacob Zuma was very receptive to our case and agreed with us that the Department of Public Enterprises (which looks after SAA and Mango) has been a disaster. He suggested that we continue to engage with government on the issue, which we will do in addition to continuing our public awareness campaign.

We’ve been asked by a few of you about hedging and our approach to taking out hedges. Basically hedging allows us to lock in both the dollar price of oil and the Rand/Dollar exchange rate at a particular point in time. So for example if the oil price is $65 per barrel today and we think it’s going to increase over the next few months, we could take a hedge that would guarantee us a price of say $70. If the price goes above $70 we score, if the price drops, the hedge costs us money. Likewise on the Rand/Dollar side, we could lock in a rate of say R10 to the Dollar for the next few months if we thought the rand was going to weaken further. We would then make a profit on our hedge if the rand weakened but would lose money on the hedge if the rand strengthened. Our approach to hedging this financial year has been to partially cover our oil and currency exposure in order to maintain some level of stability in our cost base.

We will be meeting this week with the broader management team to brief them on the scenarios around the current global financial crisis and the economic slowdown. At this stage we still believe that the worst is still to come and the consumers and businesses are in for tougher times ahead. This will no doubt impact on our business and our drive for a more efficient and focused business is more important than ever. Each and every one of us is responsible for playing our part in looking for ways to save money, look after our customers better and do our business smarter and better so that we assure our long-term survival in the business.

Have a super week

Erik and Gidon

Diaries for the week:

Erik: Presenting the state-of-the-economy at a Comair managers’ meeting
Gidon: Travelling to Cape Town to meet our PR team and travelling to Durban to address the airport team.

[Golf_Seirra]

I think it's time we give comrade Jacob his AK and line up the senior management of SAA and do it DRC style....problem is, is that not classified as shooting yourself in the foot ?

Thank-you SAA for rejecting my CV...

[rabidrabbit]

:mad:
mango staff got a great increase yes and only a R 1m loss dont you read the papers if i worked at 1t with a r7m loss i wud be worried

[rabidrabbit]

kulula 1/2 boss (venter the other half) is full of himself what about the comair alleged corruption in malawi now wy has everyone been silent on that or the fact that novik wants to emigrate to nz

[Shrike200]

^^^ Talk about lowering the average standard of posting here...come on. Grammar fail, spelling fail, logic fail. FAIL.

http://i107.photobucket.com/albums/m305/Shrike200/cat-DrivingtodrinkFAIL.jpg

I mean "novick nodick"?!? Couldn't you do any better than that? This forum is becoming an embarrassment to South Africans in general...

[rabidrabbit]

apologies for the bad grammar yesterday. no apology for the logic.

[loandslo]

Who do you think gave Comair there first jets, routes and training?

The old Nat government of course.

Before that it was Daks and F27's.

If it was'nt for the appartheid govenment's help I do not think Novik would get so much air time - unless there was some scandal in aircraft sales.:ooh:

[777Contrail]

loandslo, please quantify your statement.

If you had ANY knowledge about Comair's operation you'll note that they only started operating the B737's after the Nats left the scene.

The 3 737's were "basic" aircraft that they bought when they became redundant from SAA. They weren't "given" anything.

Before that they leased a F28 for a short while to test the waters.

[Q4NVS]

...to subsidise and support SAA, SA Express and Mango.

South Africa: SA Express Flying High on New Fuel-Efficient Aircraft

Business Day (Johannesburg)

13 November 2008

Julius Baumann
Johannesburg

DESPITE a surge in fuel prices in the year to September, regional airline South African Express (SAX) posted a net profit of R201m, boosted by a 14,3% rise in turnover.

In the year under review oil prices surged dramatically, reaching a record $147 a barrel in mid-July. Yet the state-owned airline's total fuel cost decreased 0,1% to R286,87m from R287,17m the year before.

SAX, which did not hedge against the rising oil price during that period, attributed the cost containment to the use of modern, fuel efficient aircraft.

SAX has grown its fleet to 21, taking delivery of two new Bombardier Q400m turboprop aircraft during the year. A further two aircraft will be delivered by the end of the year.

The operating profit margin increased from 19% in the last financial year to 25% this year due to a positive growth in revenue and operational efficiency gains.

"Our financial success is also the result of investing in the right aircraft. Our aircraft are more efficient with lower fuel burn," said CEO Sizakele Mzimela.

She said the volatile oil price continued to pose challenges for SAX. "In response, we have acted swiftly to manage capacity, preserve liquidity and aggressively manage our costs."

During the year the airline increased the number of passengers carried during the 2007-08 financial year 6%.

Rich Mkhondo, head of corporate affairs, said the airline would continue to expand its network in the year ahead.

And now we understand their concerns, as one of the Government "Sponsored" airlines makes 324% more profit than the Novicks :ouch:

Rising fuel costs eat into Comair’s Profit

By: Chanel Pringle

Published: 17 Sep 08 - 10:45

Operator of British Airways and kulula airliners in Southern Africa, Comair, on Wednesday reported that the second half of its 2008 financial year had been the toughest trading environment in the history of the airline industry, with high oil prices negatively impacting on the group's costs and earnings.

The group, led by joint-CEO's Gidon Novick and Erik Venter, said in a statement to shareholders that oil now represented over one-half of its costs.

Comair's net profit declined by 43% to R62-million for the year ended June 30, compared with R109-million the year before, mainly owing to a R380-million increase in the group's fuel costs.

[reptile]

Government "Sponsored" airlines

And, if I read the income statement correctly, not a single sent received from the tax payer.

Well done SAX. This is how a government owned airline should be run.

[loandslo]

Comair started operating Boeing 737-200's in 1992.

First free and fair elections in South Africa in 1994.

:ok:

[evanb]

They will pay a dividend if the directors (appointed by the shareholder) decide to do so. Or they may choose to reinvest it in the business and get some more aircraft!

[TAVLA]

"The 3 737's were "basic" aircraft that they bought when they became redundant from SAA. They weren't "given" anything."



Yes, I remember these. Weren't they quietly sold to Comair for an undisclosed sum, instead of following the tender procedures normally associated with Transnet (hence SAA).

I also seem to remember that Flitestar were very keen to get their mitts on them (after discovering the A320's were rather expensive to operate), even to the extent of taking the issue to court. Apparently the SAA management of the time saw Comair (being leisure orientated) as less of a rival than Flightstar (business orientated). I think Flitestar collapsed before the case went to court.

[DONT THINK]

Dare i ask the question who crewed the 737's for Comair initially ......

[Yossarian]

A disgrace! Time to level the playing field once and for all!

[Shrike200]

Comair started operating Boeing 737-200's in 1992.

First free and fair elections in South Africa in 1994.

So....before those elections, people couldn't buy things for money? It had to be some kind of political favour?

Dare i ask the question who crewed the 737's for Comair initially ......

I don't know the answer to that (rhetorical?) question - but I suppose the real question is who paid them?

Anyway, it's great that SAX made a profit - one day Mango might do the same. But the bottom line is that they should be standing on their own two feet all the time. It's all very well being proud of how profitable SAX is, but the fact of the matter is that they know if times get tough, it's bailout time. Companies like 1T, Comair etc know that if things go bad, that's it...game over. No second chance, no magic parachute. It makes for more cautious thinking on their part I would imagine.

[loandslo]

SAA crew flew for them until SAA finished training the Comair crews.

As for political favours...

I have not seen any other airlines go out of their way to give their routes, aircraft, crew and training - all for an undisclosed sum to the competition for fun...

You decide.

[JeanJacquesBurnel]

A loss of around R380 million, I believe...

[TL3B]

I was just wondering if mango has published it's financial results for 2008-2009 yet? If I'am not mistaken they had two years to get this thing working!:rolleyes:

happy flying:ok: