1time airline reports major loss

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Low-cost airline 1time has reported a loss of R43.5 million for the six months to June 30, revealing a further decline in its earnings. The carrier reported a loss of R33.9 million for the same period last year.

The JSE-listed airline, which had about R320 million in short-term debt, began business rescue proceedings in August to seek protection from liquidation after it failed to convince creditors of its plans to return to profitability.
“The business rescue process is allowing us to seek agreement with our major creditors, while we reorganise the business financially and operationally,” said CEO, Blacky Komani. One of the measures to return to profitability will be to retrench workers.



Airlines have been hard hit by a combination of higher fuel prices, airport taxes and navigation fees and a recent fall-off in demand. Earlier this year newcomer Velvet Sky, a low-cost carrier operating from Durban, was forced to shut down after less than a year of operation after it failed to convince creditors and a court that it would be able trade its way back to profitability, reported Business Day.
1time partly attributed its losses for the first half of 2012 to costs associated with new routes from Lanseria and Mombasa, both of which have since been suspended. Less than expected demand for maintenance at its Jetworx division also dented performance, the airline said.