High fuel costs loom large over Comair’s financial performance in the six months ended December 31, with the listed aviation and travelling company’s earnings falling 38%.

The operator of low-fare airline kulula.com and British Airways in SA on Tuesday said its earnings per share and headline earnings per share took strain from high fuel costs and unexpected short-term aircraft costs, which offset the revenue growth.

The elevated fuel costs also hit the company’s cash generated from operations, which fell R187m to R436m. Comair’s closing cash balance also fell substantially from the previous R777m to R331m.

Image: Iress

The company — which will receive R1.1bn, along with legal costs from SAA after reaching an agreement with the national airline in relation to allegations of anticompetitive conduct — brushed aside the impact of technical recession and increased revenue by 12% in the interim period.

Comair said it expected the current weak economy to exert pressure on consumer spending “while the oversupply of seats in the domestic market continues to place downward pressure on pricing across most routes”.

Comair said earnings per share and headline earnings per share decreased 38%, from 43.6c to 27.2c.

The company's shares were down 0.87% to R5.70 in the early afternoon on Tuesday.