Setting its sights firmly on African expansion is Comair Limited (which operates BA Comair and kulula.com) with the release of its annual results for the year ending June 30. The group reported its 65th consecutive year of profit, despite what it described as “a year of tough trading in the current economic climate”. For the first time, and with a strong cash balance of R374m, the group will be investing in brand-new B737-800 aircraft that offer greater reliability, 20% less fuel usage per seat and a higher potential number of flying hours per day. The new aircraft also bode well for further expansion by Comair of its regional network with new services being introduced to Dar es Salaam and Maputo within the next few months. The group’s low-cost carrier, kulula.com, expanded its capacity “significantly” during the year, mostly out of Lanseria, which it plans to continue growing. The group’s results, says joint CEO, Erik Venter, are “decent” despite turnover remaining fairly similar to last year’s. Revenue decreased from R3,048bn in 2009 to R3,009bn in 2010. Higher volumes on both brands were offset by lower airfares, while major costs such as fuel and the rand/dollar exchange rate were stable. Profit before tax was higher, from R113m in 2009’s results to R124m in 2010’s results. The group announced an increase in earnings per share of 21% but the operating margin of 5%, adds Venter, is too low. “A margin of 10% is feasible and necessary if we are to achieve our growth objectives.” While the World Cup contributed “positively”, it did not deliver the “significant boom” anticipated as the local market refrained from normal business and leisure travel during this time. Comair expects the immediate future to remain flat as the industry remains “very sensitive” to business activity levels, which have not recovered from the 2009 recession. “We do, however, anticipate continuing to grow our market share. And with our new fleet and focus on further efficiencies, we are well positioned for much stronger profit performance in future.” Of concern, concludes Venter, is the threat of “significant increases in airfares” as a result of the proposed more than doubling of airport charges by Acsa. “The impact that this is going to have on the affordability of air travel in the domestic market is a concern.”