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VENTURES AFRICA – South Africa-based airline Comair has announced a 23 percent increase in revenue for the second half of 2013, adding that shareholders will earn an interim cash dividend of 5 cents per share of ordinary share
According to the company, the increase in revenue was attributed to a change of the company’s airplanes from four Boeing 737-300s to 737-800s, which led to a 15 percent increase in capacity.
“The four new Boeing 737-800s that were introduced into the Kulula fleet during the comparative period, contributed for the full six months of the first half of the current financial year.”
The increased capacity caused headline earnings per share to increase from 16.4 cents in 2012 to 34.3 cents resulting in a strong cash balance of R695m ($63.1 million)
The airline decided to add to its fleet of airplanes by making pre-delivery payments for four Boeing 737-800s. The end of 2015 and 2016 will deliver these.
Although Comair has recorded growth in revenue, operating costs have also shot up by 18 percent in comparison to the same period in the last fiscal year. This it attributed to the hike in fuel jet price in December 2013, which increased by 225 percent on the previous price of R4 ($0.4) per litre
The current position of the rand in the foreign exchange market, which has shot up fuel price, is a major driver of the prices of tickets
“The continued devaluation of the [South African currency] has driven the rand price of fuel and dollar-based technical services to record highs. We therefore do not foresee early growth in market volumes as ticket prices will remain at the levels necessary to recover such escalating costs,” the company stated.
Despite the increase in fuel price, the airline is confident it remains well placed for the 2014 fiscal year.
This will be however be dependent on South Africa’s ability to rise above the recent economic hardships occasioned by strikes in its mining sector and create conducive environment for the local and foreign companies.