Investment in new fleet of R2.5-billion over next four years
Johannesburg, 20 July 2012: This week South Africa’s no frills airline, kulula.com, operated by Comair Limited, celebrates the arrival of the first of seven spanking new Boeing Next-Generation 737-800’s. This aircraft heralds a new phase for the flight operator and by end of the year it will have three new 737-800’s in operation throughout the country to add to its five leased 737-800’s. This will give kulula the youngest fleet in Southern Africa, with an average age of about five years.
The operator has come a long way since its launch in 2001 with one leased aircraft, one route and a handful of passengers. By end 2012 it will operate eight aircraft in total, carrying 2.8 million passengers over 12 routes across the region. The R2,5-billion investment in its fleet upgrade is fundamental to Comair's business strategy of consistently improving customer service and value, while ensuring a sustainable airline.
Commenting on its substantial investment, CEO of Comair Limited, Erik Venter says, “The new 737-800’s utilise 18 percent less fuel per seat than the aircraft we are replacing, thereby saving two million-litres of fuel per aircraft per year for the equivalent total seats. Our decision to purchase these highly fuel efficient aircraft was not taken lightly and is a critical component in managing our exposure to the volatile fuel price.”
Venter added that the new Boeing 737-800 aircraft will also require significantly less maintenance than the existing fleet, allowing for higher utilisation and lower operating costs.
“The sustainability of an airline is driven by its ability to generate sufficient profits to allow for reinvestment in its infrastructure and assets. The ownership of aircraft as opposed to leasing thereof will significantly contribute to our profit/reinvestment cycle, and Comair’s history of more than 60 years of operating profitably can largely be ascribed to us owning at least 50% of our fleet. While this does add to the long term debt on Comair's balance sheet, it is not onerous when compared to the comparative lease obligations on the aircraft that are being replaced.”
“We are managing our assets very actively and will continue to do so - an example of this is that we decided to pre-sell the fourth aircraft, due for delivery in December, to an aircraft lease company due to pressure brought on by the poor trading conditions in the first half of the 2012 financial year.”
Congratulating Comair on its latest acquisition, Robert Faye, director of Sales for Africa at Boeing Commercial Airplanes, says that the Boeing 737-800 Next Generation is a perfect fit for kulula’s business model. “High fuel prices and maintenance costs are putting severe pressure on the total operating costs of airlines across the world and the new aircraft is designed to meet the needs of carriers like kulula.”
The three new Seattle-built aircraft, which will be in operation before the end of the year, have been financed partly through equity (15%) as well as an 85% loan backed by USA-based Export-Import Bank, arranged through Investec Bank. The next four Boeings ordered by Comair will be delivered in 2015 and 2016.
All of Comair's pilots have been trained extensively on the new aircraft as the operator invested in a new Boeing 737-800 flight training simulator in 2011 at a cost of R80 million.
“We are excited about our new aircraft and we are confident that this investment strategy will support kulula in delivering the great value that its customers have been familiar with since its launch 11 years ago,” Venter concluded.
Note to editor
- kulula is spelt with a lowercase ‘k’.
kulula (from the Zulu word meaning ‘easily’) is SA’s top privately-owned commercial airline, and is operated by Comair Limited. This adventurous brand, which celebrated its 10-year anniversary in 2011, has since inception revolutionalised air travel in South Africa by making flying much easier and more affordable to customers. kulula is proud to be the only private airline in South African that is accredited with IOSA (IATA Operational Safety Audit), the global safety benchmark that enforces rigorous airline safety standards. kulula has been rolling out its Boeing 737-800 (189 seats) fleet upgrade plan since 2010 and operates over 366 flights a week across 12 domestic routes.
For more information about kulula and its various offerings, including affordable holiday packages, the kulula mobi site and online check-in service, visit www.kulula.com (the largest online retailer in the country). Become a kulula fan at www.facebook.com/iflykulula or follow us on twitter (http://twitter.com/kulula)
Boeing Commercial Airplanes, a business unit of The Boeing Company, is committed to being the leader in commercial aviation by offering airplanes and services that deliver superior design, efficiency and value to customers around the world. There are more than 12,000 Boeing commercial jetliners in service*, flying passengers and freight more efficiently than competing models in the market.