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S. African Airways Profit Up 45% As Fuel Prices Fall

Sept. 13 (Bloomberg) -- South African Airways, the biggest airline in Africa, said fiscal full-year profit rose 45 percent as lower fuel prices helped counter falling passenger and cargo levels.

Net income climbed to 581 million rand ($81.3 million) in the 12 months though March from a restated 402 million rand a year ago, the Johannesburg-based, state-owned airline said in a statement handed to reporters today. Average fuel prices fell 25 percent in the period, the company said. Passenger figures fell by 2.4 percent, while cargo revenue slipped 14 percent.

“Despite the fact that we’ve had a tough environment we still made this profit,” Chief Financial Officer Kaushik Patel told reporters in Johannesburg.

SAA returned to profit for the first time in three years in 2009. The airline cut jobs, renegotiated terms on the delivery of new Airbus A320 aircraft and employment contracts, and switched to using more fuel-efficient planes to boost earnings.

Routes within Africa remain SAA’s most profitable, said Chief Executive Officer Siza Mzimela. The airline may form partnerships with other companies to expand its business within the continent, she said.

“We believe as South African Airways that we have a big role to play in growing intra-African travel,” Mzimela said.

SAA is “relatively confident” it won’t be fined for fixing the price of fuel surcharges and cargo rates, she said. South Africa’s antitrust regulator in July recommended it be fined along with British Airways Plc, Air France-KLM, Alitalia SpA, Cargolux Airlines International SA, Martinair Holland NV and Deutsche Lufthansa AG.

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net.

To contact the editor responsible for this story: Peter Hirschberg in Jerusalem at phirschberg@bloomberg.net.

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