1time pips peers


Budget airline group 1time Holdings expects a boost in revenue in the second half of the year on higher passenger numbers and growing third-party demand for aircraft maintenance services.

CEO Glenn Orsmond yesterday reported an increase in headline earnings to R50.9 million for the six months to June 30 compared with a headline loss of R6.3 million last year.

This is in line with a company statement to the JSE Securities Exchange late last month.

Engineering News reports its headline earnings a share improved to 24.22c a share compared with a three cents a share loss last year while revenues were up by 35% to R613.9-million, compared with R455.4-million for the year to June 2008.

1time`s airline business had grown revenues by 20% to R508 million, while passenger numbers were up by 12%, as a result of the overall domestic travel market declining by about 10% in the six months, which led to further market share gains for the airline.

Business Report notes last year`s loss was due to then-soaring fuel prices.

This year 1time benefited “from the recessionary conditions as travellers switched from full service airlines to their cheaper competitors while the price of fuel came down by an average 37%.”

Engineering News adds that the airline`s aircraft maintenance business has also bloomed following the merger of 1time`s Aeronexus Technical and Safair Technical in April when the carrier took a 72% stake in the latter.

Revenues in the combined business increased to R151.9 million in the period, up 137% on the R64.1-million achieved the year before.

The division`s operating margins have, however, been negatively impacted on by merger costs and a strong rand, with the maintenance revenues being largely dollar-denominated.

The airline, which already operates a fleet of ten standard stage III MD80 type aircraft operating in excess of 1200 flights a month to nine destinations, is also to acquire new aircraft in the second half of the year to satisfy demand for its route to Livingstone, in Zambia, Engineering News added.

Airlines have had a torrid two years, with input costs soaring last year because of a fuel price bubble. Just as that cooled, the “Global Recession” hit, slashing demand for passenger and cargo transport.

The profit stands in contrast to massive losses elsewhere. The International Air Transport Association last month warned that the industry as a global whole faced losses of at least $9 billion this year.   

IATA CE Giovanni Bisignani describes the present as an “extremely challenging times for airlines.”

He avers that there “are no signs of an early economic recovery. Other external risks are potentially great, including rising oil prices and the impact of Influenza A(H1N1) on demand.

“Cash flow is threatened by weak demand, exaggerated by fare discounting. And, after years of cost reduction, the scope for further cuts is limited.”

Pic: 1time airplane