One of the nice things about reading things on PPrune is the amount of rubbish spoken!
A business that has been profitable for 50 years and needs to expand can do it several ways - by raising capital on the equity market or by selling part of its shares as well. It is well known that Comair is a sought-after business and they are ideal for a takeover, to enable them to expand. Sure they have sold a lot of equities, but the whole deal has been financed by a well known investment bank is SA. Sure it is going to be a BEE-related company and the deal will officially be announced shortly, but have any of you thought of this:
BA plc, as an overseas investor, owns 18% of Comair and in terms of present legislation, this is the maximum allowed to be owned by a foreign company, if no there is no BEE element. Should there be a BEE element, that ration can be increased to 40%. mmmm
Furthermore, it is a well known fact that BA plc is very happy with Comair's performance - proof of this is the fact that they are the only franchise that BA plc has invested in and also Comair has, for the last 6 years or so, been the top franchise performer in the BA group of companies, consistently earning the award as the best run franchise in terms of opperational delivery and performance.
As to them getting rid of the MD's - FACT. Just like the B737-200s they will also be phased - as I type this, I am aware that they are looking at bigger a/c in the desert - both for Kulula and the BA brand - with a shortage of slots available out of FAJS how else can you expand, short of getting bigger a/c? Talk of the AIrbus is a joke Comair is a Boeing company - just look at their simulator section to see that and how important that is to the Company. Do you really think they will train their pilots to fly Airbus and then allow them to train other pilots on Boeings as well??
Sure they combing Kulula flts and BA flts, by cancelling kulula flts - but that is a straight economic decision. In terms of the BA franchise and IATA rules you cannot cancel flights because of poor loads, should they do that they will be liable for fines from BA plc and possible termination of the franchise because they have not met the rules, never mind possible censure from IATA. So with kulula not being an IATA airline, rather cancel kulula flts and combine them with BA ones. Great economic decision, if you ask me.
Have you also thought about the insurance savings for Comair being part of the BA group? I know the savings are far more than the annual franchise fees they pay, so it makes sense to stay within the BA group.
As a small time investor who enjoys playing the South African and overseas equity markets I just wish I had more money to buy Comair shares.
On a a totally unrelated point, did you know that SA Express told Equity that if they continue to hanlde 1Time, they would cease all their handling contracts with Equity. WHo is smoking what at SA Express - who do they think will do their handling around SA - Swissport ? opposition to Equity and SAA??