The key to sustained airline profit is apparently to have non-airline businesses. For one South African airline, that has resulted in profit for 72 years in a row.
Comair was founded in 1946. For the last 72 years, it has operated domestic and regional flights from its hub in Johannesburg. Last year the carrier reported profits of $23.5 million USD, its highest ever. But the profit itself was no surprise. For every year the airline has been in existence, it has reported profit. Without exception.
Comair partners with British Airways. In fact, all of its aircraft have British Airways livery on it. Comair also operates Kulula, a low-cost carrier also based in Johannesburg.
But that’s just part of what Comair does. In fact, 25% of 2018 profit came from non-flying sources.
Richard Holmes of Skift notes the following four non-flight profit centers for Comair:
- The Comair Training Centre – flight simulators, a cabin crew academy and ground crew training – which teaches crews from 30 international airlines.
- Comair Travel, South Africa’s largest online retailer by value.
- Food Directions, which provides in-flight catering. It services local retailers, airlines and airport lounges.
- Comair’s SLOW lounges, which host both British Airways’ premium passengers and qualifying customers from global airlines and financial institutions.
So while the flying still accounts for 3/4 of Comair’s profit, its lounges, simulators, website, and catering divisions also help to sustain perennial profit. Comair’s resounding success is not the result of a highly-protected market. South Africa liberalized its aviation industry as the Apartheid era drew to a close in 1991. Many entrants have come and gone. Comair has persevered.
What a juxtaposition between Comair and South African Airways, an airline that seems always on the cusp of bankruptcy. Perhaps South African Airways should go into the lounge, catering, and flight training business and leave the flying to others!