Comair outperforms travel industry peers

COMAIR has effectively
doubled its prot, as was
forecasted at the end of
January, outperforming other
listed entities in the tourism
sector. On the same day, Sun
International warned that its
earnings per share in the
same period would be down
about 20 %.
The airline announced its
nancial results for the six
months ended December
31. Earnings per share and
headline earnings per share
more than doubled as they
grew to 34,3 cents, compared
with prior period EPS and
headline EPS of 16,4 cents.
Comair shares shot up
10%, following the results.
The airline’s shares have
soared, seeing a 129% hike
since November 2012, when
the shares were trading at
170 cents. 1time exited the
market in November 2012.
Other companies in the
travel and leisure index on the
JSE have seen only an 18%
increase in share prices over
the past two years.
Comair’s revenue also
grew by 23%, which, it said,
was attributable to the 15%
increase in capacity arising
from the replacement of
B737-300s with the larger
800s. The airline has ordered
another four new B737-800s,
which are expected to be
delivered in late 2015 and
2016. Cash generations were
strong, resulting in a cash
balance of R695m, the airline
reported.
Despite the positive results,
Erik Venter, ceo of Comair,
said in a statement ticket
prices would remain the
same, as the levels were
necessary to recover the
escalating costs of fuel and
the continued devaluation
of the rand. He said the
domestic market was
plagued by overcapacity. “The
additional capacity provided by
our eet upgrade programme
as well as similar increases
introduced by the stateowned
airlines, have resulted
in greater capacity in the
domestic market than existed
prior to the exit of our privately
owned competitors in 2012.
The resulting negative effect
on seat occupancy levels has
kept competitive pressure on
ticket pricing. The expected
entry of further airlines into
the market will exacerbate the
overcapacity.”