Low-fare air carrier Kulula.com, an airline brand of JSE-listed Comair, has implemented a new inventory, reservations and logistics system to boost profitiblity through a partnership with Sabre Airline Solutions.
In its financial report for the year ended December 2011, the Comair reported that it grew its revenue by 17% in H2, but incurred an operating cost of R2,008 billion – up 24% from R1,607 billion the previous year.
The sharp increase in operating costs was mainly due to the ever-increasing fuel prices; the weak economic climate; and airports’ tariff increases of more than 70% .
EPS declined from 10,3 cents in December 2010, to a loss per share of 4.9 cents in 2011. The company also lost R10,7 million after the disposal of three Boeing 737-200s in 2011.
On the backdrop of its financial results, Comair CEO Erik Venter spoke about the company’s plans to make the airline more profitable – which included the proposed partnership with Sabre Airline Solutions for a system overhaul.
Sabre Airline Solutions is a provider of airline IT and business solutions, and delivers software as a service for airlines and airports, to help them better market schedules, sell products, serve customers and operate efficiently.
Comair’s Venter believes that change is the only way to survive in the low-fare airline market, which has become increasingly challenging to operate in.
“We are focused on dramatically re-engineering the airline business,” Venter said, “Airlines that do not substantially reinvent themselves are unlikely to survive in this challenging environment as demonstrated by the failure of a number of global airlines such as Spanair and Malev Airlines during the first weeks of 2012,”
“External factors such as the high oil price and a weak global economy will prevail for the foreseeable future and we’ve therefore taken dramatic action through a cost reduction programme.”
He added that the company had embarked on several cost saving projects such as setting up its own catering unit which aims to reduce catering costs by 25% and establishing a crew base in Cape Town to reduce crew accommodation costs by 80%.
“We are also focusing on optimising our flight schedules and we are positive that these short- and medium-term measures will significantly improve Comair’s financial performance in a consistently tough trading environment.”
Logistics system overhaul
The new inventory, reservations and logistics system which has been implemented by Kulula will allow travellers to book multi-city trips with one transaction, while also introducing the ‘travelbank’ payment system which allows the airline to credit money into an account.
The new system is designed to keep users informed while planning trips to ensure they stay within their budgets, and also makes them aware of flight times, changes and other flight information via SMS notifications.
Kulula’s fare and schedule information will also be available to Sabre travel agents worldwide, with real-time seat availability, allowing the airline’s ancillary products and services to be sold in the Sabre global distribution system (GDS).
The systems overhaul is primarly operating in the background workings of the airline, though Kulula warned that some changes would impact travellers more directly.
“Traveller details must be the same as on the traveller identification, as no name changes can be made at a later stage. Flights will only be confirmed, once payment has gone through, so the first to pay will be the first to fly,” Kulula said
“We’ve been working long hours to ensure a successful cutover. Initially there may be teething problems, but rest assured; every step has been taken to minimise disruption.”
“Sabre is a great business partner and we know that using their technology and leveraging the power of the GDS will only help Kulula in its growth,” it finished.