kulula.com

Comair net profit up but external factors make for a cautious outlook

British Airways franchisee Comair reported a strong net profit for the year ended 30-Jun-2011, however external factors are expected to create a challenging environment ahead. The South African carrier reported a slightly smaller operating profit for the year and the second lowest operating profit in the past six years. FY2010 saw a strong operating profit due to the 2010 FIFA Football World Cup, which gave most South African carriers a temporary boost. The effects of this period however have been cut short by the rising cost of fuel, increase in ACSA tariffs and general economic conditions. FY2012 is expected to be a challenging period for Comair and it has suspended any significant growth plans in anticipation of this. Comair is still implementing its fleet renewal programme, which will see it and its wholly-owned low cost subsidiary Kulula operate a fleet of next generation B737s.

The development of Lanseria Airport - a secondary airport service Johannesburg - as a regional hub is progressing for both Comair brands, but particularly for Kulula. While the carrier is readying itself for tough operating conditions ahead, its new hub is set to benefit from high investment, construction projects and increased capacity.

Lanseria Airport gears up to offer the first real challenge to ACSA in Johannesburg

South Africa's Lanseria International Airport’s newly published five-year plan calls for expansion including the extension of its runway to accommodate A300s and B767s and the construction of a new passenger terminal and hotel. The LCC 1Time will soon join rival kulula.com there, ending kulula’s scheduled service monopoly. The end result, together with the experience the Lanseria management accrued with private jets during the World Cup, is some real opposition for the first time in the Johannesburg area to ACSA’s O R Tambo Airport.

1Time targets intra-Africa expansion

South Africa’s 1time signed an agreement with Solenta Aviation and ACIA Aero Holdings in Dec-08, aiming to expand its operations across Africa. The agreement forms part of a funding arrangement, permitting the Solenta/ACIA Group to purchase shares in 1time. The group cited acquisition and growth opportunities as a key reason behind the agreement.