Comair flying high
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Comair flying high
Good news for Comair
High fuel prices in the last six months could not ground airline operator Comair's profits which increased by 95% to R52m (R27m) compared with the corresponding period in 2005, the company reported on Wednesday. Comair said "despite a record high average fuel price adding R60m to operating costs", headline earnings per share (HEPS) increased 96% to 13.1 cents compared with 6.7c. The increase in the fuel price is reflected in the 13% increase in operating expenses to R1.04bn in the six months to December from R923m in the six months to June 2006. This is however lower than the R1.8bn in operating expenses recorded for 2005 comparable period.
Comair said in a statement "the strength of our British Airways and kulula.com brands, along with a consistent focus on customer service, has driven revenue growth in excess of the industry average". Comair is the only listed airline company in South Africa. Its major competitors are state-owned South African Airways (SAA) and its offshoot, Mango. SAA lost more than R680m in the six months to September 2006 after it saw its operating profit drop 90% to R65m in the year to March 2006. This happened despite SAA claiming to have had a record number of passengers in the period. Mango has been in the air for just over three months and hence no financials are yet available. Comair turnover increased 16% to R1.1bn through growth in passenger volumes, occupancy levels and yields, it said. "The fleet replacement programme continued to improve operating efficiencies while enhancing the potential for revenue growth." Comair added that it had boosted its fleet by purchasing another Boeing 737-400 for cash during the period, and plans to upgrade three additional aircraft to more modern and efficient models during the remainder of the financial year. Addressing future prospects of the company, Comair said the launch of a third state owned, low cost airline, had further increased competition "in the already overtraded" domestic market. "This will add downward pressure on ticket prices and occupancy levels for the privately owned airlines as well as for the state owned airlines."
But lower fuel prices are set to provide some relief. A barrel of Brent crude oil fell from a high of over US$78 in August to a low of US$60 in December before falling further to a low of US$51 in January. It has since ticked up to the current US$58. Comair put faith in its ability to attract, develop and retain "the best people" as the key to overcoming industry challenges. "We expect that the strength of our brands and quality of our people will continue to deliver the high levels of service that will ensure a successful 2007 financial year."
Comair said in a statement "the strength of our British Airways and kulula.com brands, along with a consistent focus on customer service, has driven revenue growth in excess of the industry average". Comair is the only listed airline company in South Africa. Its major competitors are state-owned South African Airways (SAA) and its offshoot, Mango. SAA lost more than R680m in the six months to September 2006 after it saw its operating profit drop 90% to R65m in the year to March 2006. This happened despite SAA claiming to have had a record number of passengers in the period. Mango has been in the air for just over three months and hence no financials are yet available. Comair turnover increased 16% to R1.1bn through growth in passenger volumes, occupancy levels and yields, it said. "The fleet replacement programme continued to improve operating efficiencies while enhancing the potential for revenue growth." Comair added that it had boosted its fleet by purchasing another Boeing 737-400 for cash during the period, and plans to upgrade three additional aircraft to more modern and efficient models during the remainder of the financial year. Addressing future prospects of the company, Comair said the launch of a third state owned, low cost airline, had further increased competition "in the already overtraded" domestic market. "This will add downward pressure on ticket prices and occupancy levels for the privately owned airlines as well as for the state owned airlines."
But lower fuel prices are set to provide some relief. A barrel of Brent crude oil fell from a high of over US$78 in August to a low of US$60 in December before falling further to a low of US$51 in January. It has since ticked up to the current US$58. Comair put faith in its ability to attract, develop and retain "the best people" as the key to overcoming industry challenges. "We expect that the strength of our brands and quality of our people will continue to deliver the high levels of service that will ensure a successful 2007 financial year."
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Loved the dig at SAA and Mango, its been so boring having no negative press from Comair to deal with lately. Had a chat with the lads at Mango a few days ago- and you will never guess who walked into their offices at JNB and asked to speak with Mr Bezuidenhoudt....one Gidon Novick! left his business card and everything- now what would he want to talk to Mango about.....
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Well now that Comair have decided to start replacing their MD80's maybe they want to give them to Mango at a good rate.........
With all the rumours of more a/c for Mango..... even heard they are looking at B737-200s from Safair now that big brother is not too keen to give them more a/c
With all the rumours of more a/c for Mango..... even heard they are looking at B737-200s from Safair now that big brother is not too keen to give them more a/c
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Well now that Comair have decided to start replacing their MD80's maybe they want to give them to Mango at a good rate.........
With all the rumours of more a/c for Mango..... even heard they are looking at B737-200s from Safair now that big brother is not too keen to give them more a/c
With all the rumours of more a/c for Mango..... even heard they are looking at B737-200s from Safair now that big brother is not too keen to give them more a/c
likewise the 200's.They are on track for 4 more aircraft this year- minimum, all of them beautiful 737-800's!
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SAA merely passes on the their lease rate to Mango- so its neither here nor there. SAA has created Mango and its not about to let it die a slow death through lack of capacity therefore I can assure you that the aircraft will be forthcoming, the only constraints that exist currently will be when the request comes in - in terms of where we are in the schedule cycle- it has to be in a seasonal change, so that there can also be allowances made for the use of more wide bodies domestically. As well as Mango's ability to crew the aircraft (this is governed by notice periods of new recruits and sim availability) also its become practice to increase capacity prior to peaks in leisure traffic volume and this year should prove no different.
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Deskjockey, you are obviously well entrenched within the hallowed hallways of SAA HQ, and obviously not too overworked considering how much company time you spend perusing PPrune. However, even SAA admits that the rate they lease the B738's to Mango for is a market related rate and not necessarily the rate which they are paying to the leasing company. Being as informed as you are, you should know about the balloon payments on the B738 fleet so masterfully negotiated by the R250 million man, Coleman Andrews. However, for those who are not in the know, Mango is profitable as a stand alone entity although they did admittedly start operating during the peak season. And with SAA looking for more B738's for the mainline operation, I don't see them releasing any more to Mango.
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jbayfan, thank you for your concern relating to my time management- obviously keeping an eye on pprune during the day really occupies most of your attention and therefore you cant get anything else done.
You may not like what I have to say as it relates to the expansion of Mango but its going to happen SAA will provide the equipment. End of story.
You may not like what I have to say as it relates to the expansion of Mango but its going to happen SAA will provide the equipment. End of story.
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I'm sure the post read "COMAIR FLYING HIGH" and then some railway employee comes and makes it all about their "fruity" outfit.
Lets focus on the positive, good work the PUBLIC company Comair does without any help from anybody, fancy that. Making money, aint that a novel idea.
Lets focus on the positive, good work the PUBLIC company Comair does without any help from anybody, fancy that. Making money, aint that a novel idea.
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This thread was aimed at giving praise to comair. Desjocky if you dont like it start another thread.
easy girls! no reason to start going at one another's throats like a bunch of hosties!
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For those of you that think Deskjockey doesn't know what he is talking about, here's a quote that he made on the SAA/Mango thread on the 28th Oct 2005, 08h26:
"There is absolutely no future in SAA launching it's own LCC arm..."
Looks like his bosses really valued his opinion at the time. Now he does what any good sycophant would - sing Mango's praises! (Don't go deleting it now, big fella).
"There is absolutely no future in SAA launching it's own LCC arm..."
Looks like his bosses really valued his opinion at the time. Now he does what any good sycophant would - sing Mango's praises! (Don't go deleting it now, big fella).
Last edited by journeyman; 9th Feb 2007 at 18:39.
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DJ sorry, I do enjoy your threads, however as to SAA providing Mango with more 800's......I dont think so, rumour has it SAA getting 2 from our European buddies to replace the ones sent to Mango.
You may be right, I hope not, would be good for Mango to stand on its own two feet and find its own 800's instead of relying on big brother.
Hows it going with the old bullet Captains? they had enough yet?
Have to add, well done Comair (this is a thread about Comair after all)
.
You may be right, I hope not, would be good for Mango to stand on its own two feet and find its own 800's instead of relying on big brother.
Hows it going with the old bullet Captains? they had enough yet?
Have to add, well done Comair (this is a thread about Comair after all)
.
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For those of you that think Deskjockey doesn't know what he is talking about, here's a quote that he made on the SAA/Mango thread on the 28th Oct 2005, 08h26:
"There is absolutely no future in SAA launching it's own LCC arm..."
Looks like his bosses really valued his opinion at the time. Now he does what any good sycophant would - sing Mango's praises! (Don't go deleting it now, big fella).
"There is absolutely no future in SAA launching it's own LCC arm..."
Looks like his bosses really valued his opinion at the time. Now he does what any good sycophant would - sing Mango's praises! (Don't go deleting it now, big fella).
PS yes Im very pro Mango- why- because it makes good business sense, but I digress well done Comair on your results…..that’s what the thread is for isn’t it?
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I’m sure you would like to believe that, if self delusion is your thing, then go for it pal! The fact of the matter remains that there were enormous risks associated with going with a stand alone LCC- one of them was the competition commission, another was the collective agreements in place with the pilot body. These issues were seen as show stoppers – hence the proposed evolution in the mainline product. Fortunately the dialog that was had with both the pilots and the competitions commission proved fruitful and the door was open to go for the LCC- the outcome of these discussions was most unexpected- hence the strategy going in another direction.