The domestic aviation industry continues to have surplus capacity, resulting in occupancy levels that remain low by international standards, says JSE-listed Comair.
The company, nevertheless, grew its revenue by 6% for the six months to December 31, as a result of a recovery in yields, but without any increase in volumes.
“Costs remained flat, with local inflationary pressure being offset by the improved exchange rate applicable to foreign currency-based expenses,” it said in a statement on Tuesday.
During the period, Comair took delivery of one new Boeing 737-800 aircraft and one leased Boeing 737-800 aircraft to replace its Boeing 737-400 aircraft as part of its fleet replacement programme.
Comair achieved an after-tax profit of R199-million and earnings a share and headline earnings a share of 42.8c.
Cash generated from operations remained healthy at R448-million, resulting in cash on hand of R949-million as at December 31.
PROSPECTS
Weak economic growth is expected to maintain pressure on consumer spending and Comair foresees continued pressure on margins in the aviation industry.
“Comair is, however, well placed to operate in these conditions, with strong brands, committed staff, effective equipment, an efficient cost base and strong cash reserves,” it said.
Comair anticipates that the exchange rate will remain volatile and that the price of oil will continue on an upward trend.
“The ongoing upgrades to our fleet provide mitigation to the expected increase in the fuel price, while also providing an improved customer experience.
“The new fleet, along with improved technology-driven operating processes, will ensure that we maintain a healthy competitive advantage for the benefit of our customers.
“Our travel business, flight training facility, catering business and airport lounges are opportunities for further growth,” it said.