Comair records 17% fall in profit
COMAIR yesterday recorded a 17 percent decline in annual profits, saying that all gains from the collapse in the oil price had been returned to customers when it was drawn into a price war with new entrants to the South African domestic airline market.
The airline, which operates services as a British Airways franchisee and under its own Kulula brand, said revenue for the year to June had been steady at R5.9 billion.
Profit was down from R265 million to R219m, thanks largely to a price war with new competitors FlySafair and Skywise, which entered the market “with very aggressive, but more than likely unsustainable pricing”. Headline earnings a share came in at 47.9 cents, down from 57.8c last time.
Despite the new capacity in the market, Comair said it had maintained its passenger volumes largely due to the strength of the Kulula and British Airways brands.
Another price war may be on the horizon, though, thanks to Skywise’s latest offering of unlimited flights between Johannesburg and Cape Town for R7 999 a month.
Time will tell how happy it will make those who must frequently commute between the Mother City and the City of Gold to effectively get flights for free after a certain number of trips in a month.
Comair, in the meantime, remains focused on more traditional ways of keeping customers and shareholders happy. A final dividend of 10c a share was declared, bringing the total for the year to 18c, up from 15c last time.
Comair also noted that its black economic empowerment transaction with the Thelo Consortium matured in September, creating realised value of R152m for participants. FIVE people have been arrested in the past week for contravening the National Credit Act (NCA). The National Credit Regulator (NCR) said in a statement yesterday that raids to root out illegal credit providers were conducted in Wellington, Paarl, Stellenbosch, Strand, Woodstock, Robertson, Bellville, Goodwood and Wynberg. The NCR had investigated 21 credit providers, spokeswoman Jacqueline Boucher said. “The suspects were found to be in possession of 71 pension cards, seven ID books and five bankcards,” she said. Boucher said the focus of the raids were primarily on credit providers who were unlawfully retaining the pension cards, bank cards, identity documents and PINs of their clients as surety. – ANA
MINING
ZAMBIA’S environmental management authority yesterday ordered Konkola Copper Mines (KCM) owned by Vedanta Resources to dispose of copper concentrates it imported from Chile because they had high levels of arsenic, a toxic substance. Zambia’s environmental authority said KCM must submit a full programme for sending the material back to Chile or to other smelting facilities outside Zambia by Friday. “KCM has been directed to immediately stop any plans to process the copper concentrates containing high levels of arsenic,” the Zambia Environmental Management Agency (ZEMA) said. KCM said in a statement it would “fully comply” with the ZEMA directive and that it was working on logistics to take the copper concentrate out of Zambia. – Reuters