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Comair looking at launching its own UK-SA flights

Comair looking at launching its own UK-SA flights

Old Aug 20, 2007, 9:36 am
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Comair looking at launching its own UK-SA flights

An interesting development from BA's South African franchisee.

(Bloomberg) -- Comair Ltd., British Airways Plc's franchise operator in southern Africa, applied to the International Air Services Licensing Council to begin flying between South Africa and London.
Comair is ``investigating various options to acquire wide-body aircraft that would be required to operate the long-haul route,'' the Johannesburg-based carrier said in an e-mailed statement today.

Last edited by aristoph; Aug 20, 2007 at 11:00 am
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Old Aug 20, 2007, 9:38 am
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Originally Posted by aristoph
An interesting development from BA's South African franchisee.

(Bloomberg) -- Comair Ltd., British Airways Plc's franchise operator in southern Africa, applied to the International Air Services Licensing Council to begin flying between South Africa and London.
Comair is ``investigating various options to acquire wide-body aircraft that would be required to operate the long-haul route,'' the Johannesburg-based carrier said in an e-mailed statement today.
This would be a very welcome development IMHO, Comair's service is leaps and bounds ahead of BA on equivalent shorthaul routes.
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Old Aug 20, 2007, 10:40 am
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That would be nice.
Another nice thing Comair does is upgrade the Golds from Y to J if there is availability. I probably run at a rate of 60% of upgrades when I go to SA and have to fly domestic. South African seat pitch would be also nice.
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Old Aug 20, 2007, 12:35 pm
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Originally Posted by helahela
That would be nice.
Another nice thing Comair does is upgrade the Golds from Y to J if there is availability. I probably run at a rate of 60% of upgrades when I go to SA and have to fly domestic. South African seat pitch would be also nice.
^^^ Ditto^^^

I love Comair crew. They are the best in class..

Now I am curious, are they going to compete directly with BA on this very profitable route?
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Old Aug 20, 2007, 1:12 pm
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Originally Posted by ACfly
Now I am curious, are they going to compete directly with BA on this very profitable route?
Oh, I hope so.

IIRC BA regards its investment in Comair as non-strategic, unlike its lower (percentage) share of Iberia. Perhaps a sale of the Comair stake is on the cards, like its former share of Qantas?
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Old Aug 20, 2007, 1:34 pm
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Originally Posted by Roger
Oh, I hope so.

IIRC BA regards its investment in Comair as non-strategic, unlike its lower (percentage) share of Iberia. Perhaps a sale of the Comair stake is on the cards, like its former share of Qantas?
Where have you heard this before? Unless I misunderstand the meaning of a "strategic" investment, I have always been told Comair is quite valuable to BA in terms of providing onwards services to its passengers and feeder traffic for the lucrative long-haul routes. Quite a few passengers on the CPT and JNB services will be traveling elsewhere in SA (well, JNB at least, CPT seems much more an O&D destination than does JNB). The short-haul operation is also apparently quite profitable and a preferred carrier for domestic and regional routes as compared to SA by many business travelers (that I have spoken to anyway). I could be wrong though about how it is valued by BA.

If I were Comair, I would go for the Lagos route first. The passengers on the SA route apparently hemorhage money, and it is pure profit. It would probably be much easier to get rights than trying to pry slots away from someone else at LHR (unless BA cooperates with them of course).

Would BA end the franchise agreement if Comair goes after the lucratice SA routes?
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Old Aug 20, 2007, 1:56 pm
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Originally Posted by SchmeckFlyer
Where have you heard this before?
Page 76 of the BA annual report:

The Group accounts for its investments in Iberia as an associate although the Group holds less than 20% of the issued share capital as the Group has the ability to exercise significant influence over the investment due to the the Group's voting power (both through its equity holding and its representation on key decision-making committees) and the nature of the commercial relationships with Iberia.

and

On June 9, 2006, the Group's shareholding in Comair Ltd, was reduced from 18.3% to 12.9%. Due to the Group's ability to exercise significant influence
the investment in Comair Ltd was accounted for by the equity method. In September 2006, the Group's shareholding in Comair Ltd decreased to 10.92%
and the Group no longer had the ability to exercise significant influence over the investment, at which time the investment was reclassified as an available-for-sale financial asset.


I for one was surprised to learn that SA loses money hand over fist on its European routes, especially in view of their prices virtually matching BA and VS ex LHR. It's because its planes sit on the tarmac for half a day at LHR, FRA, JNB, CPT etc and is the reason why 747s are out of the window.

I understood that JNB/CPT were the most profitable routes for BA and VS after Nigeria. Is this still the case?
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Old Aug 20, 2007, 2:12 pm
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Originally Posted by Roger
Page 76 of the BA annual report:

The Group accounts for its investments in Iberia as an associate although the Group holds less than 20% of the issued share capital as the Group has the ability to exercise significant influence over the investment due to the the Group's voting power (both through its equity holding and its representation on key decision-making committees) and the nature of the commercial relationships with Iberia.

and

On June 9, 2006, the Group's shareholding in Comair Ltd, was reduced from 18.3% to 12.9%. Due to the Group's ability to exercise significant influence
the investment in Comair Ltd was accounted for by the equity method. In September 2006, the Group's shareholding in Comair Ltd decreased to 10.92%
and the Group no longer had the ability to exercise significant influence over the investment, at which time the investment was reclassified as an available-for-sale financial asset.


I for one was surprised to learn that SA loses money hand over fist on its European routes, especially in view of their prices virtually matching BA and VS ex LHR. It's because its planes sit on the tarmac for half a day at LHR, FRA, JNB, CPT etc and is the reason why 747s are out of the window.

I understood that JNB/CPT were the most profitable routes for BA and VS after Nigeria. Is this still the case?
I believe the JFK route is still more profitable, but the individual JNB/CPT flights (more the JNB flight) are among the most profitable flights/sectors. At least, this is what I have always been told by BA staff and managers. One would hope this is the case, considering the price of tickets compared to similar long-haul stretches.

The SA 747s are out of the picture also because their lease costs soared, making them unprofitable on the route because of the issue you mention: sitting around for so long in London. But BA flights also sit around all day in JNB...? (they arrive in the morning and depart in the evening) KLM apparently is among the most effective at exploiting the JNB route, as it has both daytime and night-time flights to minimise downtime.

Surprised to hear about Comair getting less important and possibly up for sale. It also seemed as though, from conversations with local BA staff, that BA was pretty much here to stay.
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Old Aug 20, 2007, 2:32 pm
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Originally Posted by SchmeckFlyer
KLM apparently is among the most effective at exploiting the JNB route, as it has both daytime and night-time flights to minimise downtime.
KLM are the same on CPT, dayflight from AMS, but it means a pretty ratty 01:00'ish out of CPT.
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