Comair to reinvent its offering

COMAIR plans to reinvent its
product offering, following a
17% drop in profits for the year
ending June 30, 2015.
The airline will shift its focus to
the promotion of ancillary products,
as the airline “won’t be seeing
any growth from the sale of ticket
fares”, Kirsten King, Comair’s
finance director, told TNW. Although
Comair’s ancillary offering is
currently still quite small and only
contributes about 4% to the
airline’s revenue, Kirsten says this
segment contributed 11% to the
airline’s profit.
The airline is looking at launching
services such as priority boarding
and extra leg-room. ‘Branded’ fares
are also on the cards. Through the
branded fares, clients will be able
to buy a basic ticket, excluding
luggage and other services. “Clients
will also be able to buy combination
packages of a ticket with, for
example, extra leg-room and added
flexibility. This new product will
make the fare offering much more
variable,” Kirsten said.
Comair’s lounges will also be
upgraded. The airline has already
expanded its Cape Town Slow
Lounge, with the ORT Johannesburg
lounge to follow suit. Comair is also
in discussions with international
airlines to host their passengers in
the Slow Lounge at OR Tambo.
Comair cited increased
competition and unsustainably low
airfares as the reasons for the
sharp drop in profits for 2015.
The airline is not expecting any
growth for the time being as a result
of additional capacity in the market.
“To retain our market share, we
need to keep our fares suppressed.
However, we’ll continue with our
fleet replacement strategy, which is
important in terms of fuel efficiency.
We can save up to about 15% in
consumption. We’re also focusing
on keeping passengers happy
with on-time performance, tight
schedules and shorter turnaround
times,” Kirsten said.
She added that that there would
eventually be a “correction” in the
market when it came to airfares,
but said it was difficult to predict
when that would happen. “Fares
are currently 15% below what
they should be, so passengers
should expect an increase in fares
of between 10% and 15%,” said
Kirsten. Durban routes were doing
“reasonably” well, but JNB-CPT, JNBPLZ,
CPT-PLZ and HLA-CPT were all
running at a loss, she said.
“You can incur losses for as long
as you can afford it. Comair is fairly
well positioned, so we can withstand
it for some time but obviously not
forever. For now, we’re concentrating
on retaining market share by looking
at efficiencies and introducing
ancillary products.