Glenn Orsmond, Airline Division CEO, Comair, says open skies would lead to much needed discipline in the African market
With flat passenger growth, strong local competition and a struggling domestic economy dominating the South African air transport industry landscape, one would be forgiven for considering a low-cost carrier’s prospects as bleak. Comair Airline Division CEO Glenn Orsmond explains how the airline is harnessing people, innovating, and challenging regulations to ensure this isn’t the case.
What are your plans for the airline in the next couple of years?
The airline has been consistently profitable for many years, and we want that to continue. The company recently announced a restructuring in which joint CEO roles would be discontinued. Wrenelle Stander has been appointed Group CEO for Comair Limited, while I have assumed the role of CEO for the airline division.
For the airline, regional African routes will be especially important in the next few years. The Boeing MAX 737 8 is key to those routes, and there is no doubt that the problems with the MAX 737 8 have hurt our business.
We’re also transitioning our aircraft line maintenance from South African Airways Technical to Lufthansa Technik. This process is expected to take a year.
Is the local political and economic situation affecting airline operations?
The South African economy is stagnant at the moment with no real GDP growth. The trading environment is tough too, with no real passenger growth and fierce competition locally with three low-cost carriers and two premium carriers in the domestic market. We are pleased, however, that we have been able to achieve consistent passenger and revenue growth despite this.We remain confident about South Africa’s future and growth opportunities. There are exciting times ahead for this country and for our airline brands, and Comair will continue to grow in the next few years.
What Africa really needs is open skies. If the airspace can be liberated, then I’m sure it would boost demand and lead to an enormous increase in connections
Will you continue with the diversification strategy and what is the rationale behind it?
Our strategy is to create a diversified aviation group, with multiple revenue streams to reduce earnings volatility arising from uncontrollable crude oil prices and currency fluctuations.
Our non-airline, aviation businesses—travel, airport lounges, training, technology and catering businesses—generally offer consistent earnings growth at favorable margins and that allows us to achieve improved overall group margins and earnings.
There is another side to this too and that is our long experience in the aviation industry, which enables us to harness our core strengths internally. Our biggest asset—our people—will enable us to drive this strategy forward.
Do you see technology as the foundation for future success or is aviation still a people business?
Comair has invested in a technology consultancy, NACELLE, which is mainly concerned with software development to create aviation products for small-to-medium carriers.
We are in the business of people though and we will always depend on people. They ensure that the demand for air travel is met safely and efficiently.
Our purpose is to lift people up in an inspiring, empowering, and innovative way and it is that which enables us to deliver superior returns to our shareholders in the long term.
That must mean diversity is important to your future. What is the airline doing to encourage gender equality?
Diversity has always been important to us and we have a steadily improving employee gender and race mix that reflects our country. South Africa is an extremely diverse nation, a melting pot of peoples.
It is full of skills across all disciplines, so we have a long list of applicants for every job. That long list is naturally diverse in all aspects. Choosing the right people inevitably gives us a diverse workforce.
What do you see as the main trends and challenges in Africa?
There is no doubt that the continent is over-regulated, especially when it comes to who can fly where. The main problem we have faced up to now is the preponderance and protection of national airlines.
There is an element of pride in having a flag carrier, but it is simply not possible for every country in Africa to have a profitable, sustainable national airline.
These carriers are operating in shrinking markets as private airlines start up and provide better service at a more affordable cost.
What Africa really needs is open skies. If the airspace can be liberated, then I’m sure it would boost demand and lead to an enormous increase in connections. That in turn would allow aviation’s benefits to spread far and wide.
At least the visa situation is improving, and it is becoming easier for Africans to travel within the continent. That is pushing the demand for better connectivity, so the trend is promising. Of course, there are certain countries that remain troublesome but generally the constraints are loosening.
This is all about airlines being able to serve demand, wherever that demand may be. It would lead to a far more efficient intra-African network.
Is aviation doing enough to mitigate its environmental impact?
It won’t be enough until the environment is no longer an issue for the air transport industry. The targets we have are ambitious and put us on the right path.
But environmental responsibility is also about our partners in the aviation value chain and not just the OEMs or air navigation service providers either. As mentioned, if governments deregulated African aviation, it would lead to a more efficient network, which is good for environmental performance.
Comair seeks to balance aviation and customer growth with delivery of its services in an environmentally sustainable way. We also strive to lead the industry in innovative efficiency.
That means conserving natural resources, reducing, reusing, and recycling waste material, sustaining a creative and innovative workforce, and giving back to the communities in which the airline operates.
In brief… Comair
Comair has operated in South Africa since 1946. It offers airline services within South Africa, Sub-Saharan Africa and the Indian Ocean Islands, under its low-cost airline brand, kulula.com, as well as under the British Airways livery, as part
of a license agreement. In addition, Comair’s non-airline business units, include hospitality, tourism, training and technology.
Meet the fleet
Comair operates 26 Boeing 737 aircraft across its two brands. The fleet comprises 23 Boeing 737-800s and 3 Boeing 737-400s. Comair owns 10 Boeing 737-800s, as well as the 3 Boeing 737-400s, while it leases the remaining 13 Boeing 737-800s.