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 servicing 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. [1853 words]

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This report contains the following subheadings:

• Operating profit down
• Lanseria Airport Comair's regional hub in lieu of congested Cape Town and OR Tambo
• Comair’s plans to become a regional carrier slowing down
• Comair’s order for B737-800s: half to operate as Comair, half as Kulula
• Outlook for Comair cautious but for Lanseria, positive
• Comair financial results for six months ended 30-Jun-2011:
• Competition

This report contains the following charts and tables:

• Comair operating profit and operating profit margin: FY2005 to FY2011
• Location of Johannesburg OR Tambo International Airport (A) and Lanseria Airport (green arrow)
• Location of South Africa's five largest airports
• South Africa’s largest airports by traffic: 21-Nov-2011 to 27-Nov-2011
• Top 15 routes in South Africa: 21-Nov-2011 to 27-Nov-2011
• Kulula route map
• British Airways (operating as Comair) route map: FY2011
• Comair in service and on order fleet
• Comair projected aircraft delivery dates: as at 11-Nov-2011
• South Africa total capacity, seats per week, by carrier: 21-Nov-2011 to 27-Nov-2011
• South Africa LCC capacity share, % of total seats: 2001 to 2011