1TIME Holdings has denied rumours that the airline is going under or that it is merging with Velvet Sky, after announcing that Excalibur Aerospace has acquired a 29,6% stake in the company.
Excalibur recently purchased 83 million shares in 1time Holdings – at 45c a share for R37,35 million – to be effected over a four-month period.
“Excalibur is buying into 1time Holdings because it is a great business with great opportunities, not because of industry rumours created by competitors,” says ceo of 1time Airline, Rodney James.
“Why would a company buy a significant share of a company that is going under? It does not make sense. Our competitors have been telling the industry for eight years that we’re going under. How much longer will the industry continue to believe them?”
Chairman of Excalibur Aerospace, Stephen Nthite, says the opportunity to buy a stake in 1time presented itself at a time when Excalibur was putting in place strategies to grow its footprint into sub-Saharan Africa. He says the share price discount to nett asset value of the company, coupled with its 15% market share, have been key considerations.
“1time has been the fastest-growing domestic airline for the last six years. During the past two years, the airline itself has performed well, growing revenue and passenger numbers in what is generally regarded as a flat market. It has borne up well against high fuel and airport costs,” Stephen says.
Although 1time had reported a R21,3 million interim headline loss to June it is expecting further passenger growth in excess of market growth this year and will expand its reach into Africa and increase its frequencies in domestic air travel, he adds.
1time’s recent underperformance was attributable to ‘the three negatives’ of a R56m increase in the fuel price, a R12m increase in airport charges and poor demand in the general travel and tourism sector, the airline said.
Refer to TNW September 28 for more details.
