Comair sadden by 1Time closure, blames govt

Comair Limited, South Africa’s leading aviation company listed on the Johannesburg Stock Exchange, regrets the news that 1Time filed for liquidation today.

Ten out of the 11 independent, private airlines launched in South Africa since deregulation in 1991, have now failed, leaving only kulula.com and British Airways (both operated by Comair) remaining  in our skies.

Erik Venter, CEO of Comair says, “Due to the less efficient fleet it operated, the ultimate closure of 1Time was inevitable. However, we are certain that in the absence of state-subsidised Mango, 1Time would have made adequate profits to upgrade its fleet and be sustainable over the long term. Based on the previously released financial statements of SAA, and recent parliamentary comments, Mango made a loss of half a billion rand since its 2006 launch, due to undercutting the viability of the private low cost carriers.”

He added that this again brings to question the role of Mango in the South African market, its failure to disclose its financial statements – as required of all State Owned Enterprises by the Public Finances Management Act – and government’s breach of its own Aviation Transport Policy, in which it committed to a level playing field in the domestic aviation sector.

“Unfortunately the closure of 1Time occurred on a Friday afternoon at the end of the month, when most of the other airline seats have already been sold. There is therefore very little that Comair can do to assist stranded 1Time passengers.  It is also sad to see that around 1 000 1Time staff have lost their jobs at a time when job creation is a national imperative,” says Venter.

During the past year, Comair focused strongly on reengineering its operations to ensure a return to profitability by June 2012. Along with a cost saving programme, which included a salary freeze for all of its employees, it upgraded its fleet to new Boeing 737-800’s. Comair will also be taking delivery of a further three new aircraft by December 2012, resulting in kulula having the most fuel efficient fleet in the industry.

“We are confident that Comair will continue with its aviation record of 67 consecutive years of operating profit.  While we will obviously put up resistance to the unfair competition from SAA and Mango, this is not new to us. We have been dealing with this for most of our history,” says Venter.

Author: Muzi Mohale

Hi there, am your host and I blog about the tourism industry in South Africa. You're also welcome to contribute your expert content on matters affecting the industry. You can reach me on muzi[at]tourismedition.com

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