South African Airways reports 44.5% increase in net profit; Mango reports 26% profit increase
South African Airways (SAA) reported a 44.5% year-on-year increase in net profit to *USD81.4 million for the 12 months ended 31-Mar-2010, attributable to a 25% decline in the average fuel price during the period. The carrier stated the increase in profit was achieved despite a 2.4% decline in passenger numbers and a 14% slide in cargo revenue. SAA returned to profitability for the first time in three years in FY2009.
- South African Airways (SAA) reported a significant increase in net profit for the fiscal year 2009-2010, attributed to a decline in average fuel prices.
- Despite a decrease in passenger numbers and cargo revenue, SAA returned to profitability for the first time in three years.
- SAA is considering forming partnerships to expand its business in the growing intra-African travel market.
- Mango, the low-cost subsidiary of SAA, reported a profit before tax and a year-on-year increase in net profit for the same fiscal year.
- Mango was able to stimulate demand with low fares despite a shrinking domestic market in South Africa.
- The FTSE/JSE Africa All Share Index experienced a fourth consecutive day of gains, while shares of African and Middle Eastern airlines had mixed performance.
* Based on the conversion rate at USD1 = ZAR7.13940
The carrier's CEO, Siza Mzimela, stated SAA may form partnerships with other companies to expand its business in the "growing intra-African travel". No further details were disclosed. Meanwhile, Ms Mzimela added the carrier is "relatively confident" it will not be fined for fixing the price of fuel surcharges and cargo rates.
Mango CEO, Nico Bezuidenhout, stated the carrier, the LCC subsidiary of South African Airways, reported a profit before tax of USD2.6 million and a 26% year-on-year increase in net profit for the 12 months ended 31-Mar-2010, despite it being "one of the most challenging periods in aviation history". Mr Bezuidenhout added the LCC was able to continue to stimulate demand with its low fares despite the South African domestic market shrinking by 10% over the past 24 months, resulting in the carrier increasing its market share to more than 15% on the routes it operates. Mango has transported more than five million passengers over the past three years. Looking ahead, Mr Bezuidenhout believes market conditions will remain difficult as the global economy continues its slow recovery.
Meanwhile, South Africa's FTSE/JSE Africa All Share Index rallied for a fourth day, climbing 1.4%.
See related CAPA profile: Financial results
African and Middle East shares were a mixed bag on Monday (13-Sep-2010) with Lonrho (-4.6%) and Kenya Airways (-0.5%) down while Comair (+0.5%), Air Arabia (+0.9%), 1time (+1.9%) and Royal Jordanian (+2.6%) shares gained slightly.
Selected African and Middle Eastern airlines share price movements (% change): 13-Sep-2010
