South Africa: 1time Seeks JSE Lift As Fare War Hots Up
COMPETITION among SA's low-cost carriers is set to get even tougher amid plans by 1time Airline's parent company 1time Holdings to raise R30m to buy extra planes after listing on the JSE's AltX board next month.
1Time announced its plans as the parent company of kulula.com, Comair Holdings, yesterday cautioned its shareholder of reduced future earnings because of predatory ticket pricing by South African Airways (SAA) through its subsidiary Mango.
The competition among the no-frills airlines will greatly benefit customers, and with less than 10% of South Africans using air travel, the sky war could result in a sharp increase in passenger numbers.
1Time Holdings said yesterday that it would raise R30m by privately placing 60-million ordinary shares before listing on AltX on August 14.
The money would be used to buy additional aircraft to enable 1time to expand its operations in the domestic market. There were also plans to introduce regional flights as demand increased.
Part of the cash would also be used to capitalise 1time Holding's aircraft maintenance business, Aeronexus Technical. Director of marketing and operations Rodney James said the airline would acquire two new aircraft.
The airline has 10 aircraft and operate s 33 flights a day on eight domestic routes.
"Notwithstanding the significant growth achieved by low-fare airlines, less than 10% of South Africans travel by air," said James.
"This bodes well for the future of this market segment as 1time Airline expects a 20% increase in passengers," he said.
James said some of the planes would be used to meet the growing demand from governments, international bodies and corporate clients for charter flights.
1Time also planned to launch an airfreight business and would also establish an engine maintenance facility.
"Prospects for 1time Holdings are extremely encouraging," said 1time Holdings' CEO Glenn Orsmond.
"We commenced business (in 2004) with a clean slate and no historical overheads. In addition, low aircraft acquisition costs and a standardised fleet have also contributed to our success, along with our own technical maintenance operations."
Meanwhile, Comair, which operates kulula.com and the British Airways franchise in SA, has cautioned its shareholders that its future earnings could be negatively affected by SAA's predatory pricing and high fuel prices.
The privately-owned company said although its headline earnings a share and earnings a share for the year ended last month were about 40% higher compared with last year, the feat may not be repeated next year.
The JSE-listed firm blamed SAA for using its new low-cost subsidiary Mango to engage in "unprofitable ticket pricing".
Comair suggested that SAA's behaviour was anticompetitive and was aimed at driving other domestic airlines out of business.
"Shareholders are cautioned ... that unprofitable ticket pricing by the state-subsidised SAA, through its new subsidiary Mango, negatively affected industry profits in the fourth quarter of the financial year to June, and may also affect future results," Comair said in a statement.
But SAA has rejected Comair's allegation of predatory pricing, saying that "Comair's response to Mango is an indication of how Mango has raised the bar in the low-cost category."
SAA GM of commercial Rushj Lehutso said while Mango was a subsidiary of SAA, the low-cost carrier operated as a completely separate entity and that SAA had no direct say in its operations or in its pricing structure.
"SAA's decision to launch the low-cost carrier was based purely on meeting market demand for low-cost carriers," said Lehutso.
Article from http://allafrica.com/
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1Time announced its plans as the parent company of kulula.com, Comair Holdings, yesterday cautioned its shareholder of reduced future earnings because of predatory ticket pricing by South African Airways (SAA) through its subsidiary Mango.
The competition among the no-frills airlines will greatly benefit customers, and with less than 10% of South Africans using air travel, the sky war could result in a sharp increase in passenger numbers.
1Time Holdings said yesterday that it would raise R30m by privately placing 60-million ordinary shares before listing on AltX on August 14.
The money would be used to buy additional aircraft to enable 1time to expand its operations in the domestic market. There were also plans to introduce regional flights as demand increased.
Part of the cash would also be used to capitalise 1time Holding's aircraft maintenance business, Aeronexus Technical. Director of marketing and operations Rodney James said the airline would acquire two new aircraft.
The airline has 10 aircraft and operate s 33 flights a day on eight domestic routes.
"Notwithstanding the significant growth achieved by low-fare airlines, less than 10% of South Africans travel by air," said James.
"This bodes well for the future of this market segment as 1time Airline expects a 20% increase in passengers," he said.
James said some of the planes would be used to meet the growing demand from governments, international bodies and corporate clients for charter flights.
1Time also planned to launch an airfreight business and would also establish an engine maintenance facility.
"Prospects for 1time Holdings are extremely encouraging," said 1time Holdings' CEO Glenn Orsmond.
"We commenced business (in 2004) with a clean slate and no historical overheads. In addition, low aircraft acquisition costs and a standardised fleet have also contributed to our success, along with our own technical maintenance operations."
Meanwhile, Comair, which operates kulula.com and the British Airways franchise in SA, has cautioned its shareholders that its future earnings could be negatively affected by SAA's predatory pricing and high fuel prices.
The privately-owned company said although its headline earnings a share and earnings a share for the year ended last month were about 40% higher compared with last year, the feat may not be repeated next year.
The JSE-listed firm blamed SAA for using its new low-cost subsidiary Mango to engage in "unprofitable ticket pricing".
Comair suggested that SAA's behaviour was anticompetitive and was aimed at driving other domestic airlines out of business.
"Shareholders are cautioned ... that unprofitable ticket pricing by the state-subsidised SAA, through its new subsidiary Mango, negatively affected industry profits in the fourth quarter of the financial year to June, and may also affect future results," Comair said in a statement.
But SAA has rejected Comair's allegation of predatory pricing, saying that "Comair's response to Mango is an indication of how Mango has raised the bar in the low-cost category."
SAA GM of commercial Rushj Lehutso said while Mango was a subsidiary of SAA, the low-cost carrier operated as a completely separate entity and that SAA had no direct say in its operations or in its pricing structure.
"SAA's decision to launch the low-cost carrier was based purely on meeting market demand for low-cost carriers," said Lehutso.
Article from http://allafrica.com/
We're ready for 100% of South Africa. Give us a try at www.southafrica-carhire.com
Labels: South Africa - Airlines
