South Africa

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.

South African Airways profit increases as nation's smaller carriers Comair and 1time post losses

South Africa has become a competitive domestic air market, which is taking its toll on the LCC segment in particular. The country’s largest and only long-haul carrier, South African Airways, increased its profit as its restructuring continues. But it joined rivals Comair, whose profit decreased, and loss-making carrier 1time in a cautious outlook owing to increased airport charges as well as the global threat of high fuel. Despite the turbulent times, newcomer Santaco Airlines hopes to launch this year and avoid airports with high fees.

SAA's new strategy focuses on expanding African network and east-west connections

South African Airways (SAA) expects to report its third straight consecutive year of profit, achieving an unusual level of stability for a flag carrier that was in a near constant state of restructuring for most of the last decade. SAA is now starting to resume expansion, focusing primarily on growing its intra-African operation and offering new east-west connections. However, questions linger over the carrier’s ability to take on the rising Middle Eastern carriers as they continue their expansion into Africa.

Airport investment prospects in CIVETS countries – Republic of South Africa

There's "BRIC" and "N11" and now CIVETS, a disparate collection of countries (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) that are all dynamic emerging economies with inflation under control and sophisticated financial systems with an absence of "sovereign debt bombs". In addition they have youthful populations. They also share common problems that could influence airport investors adversely, such as unemployment and corruption. In the final report in this series, we analyse South Africa.