Comair widens diversification with plan to spins out IT operation
Company teams up with Infinea to provide information technology operations to the aviation and related sectors
JSE-listed aviation company Comair is widening its diversification strategy with the creation of a joint-venture business with global information technology company Infinea.
Comair operates the British Airways (BA) brand in Southern Africa as well as the low-cost carrier kulula.com.
The new business, Nacelle, will provide information technology operations to the aviation and related sectors, though Comair will be its main customer, Comair CEO Erik Venter said last week.
“Like most industries, technology plays a pivotal role in our business. That’s why we’ve decided to spin off our IT budget and team into a separate entity that will provide a variety of IT-related services, which will include the commercialisation of our intellectual property. The new venture’s strength and opportunity lies in leveraging and commercialising Comair’s decades of discipline in operational processes, with Infinea’s deep expertise in software development and IT support.”
Though the airline business is still the main contributor to Comair’s revenue, it is diversifying operations to extend beyond its core business. It operates a training centre, including flight simulators for pilot training, as well as training for cabin crew, passenger handling and aviation business leadership. The strategy includes a lounge network, a catering unit and a travel logistics business.
These investments now amount to R46m on the training facility, R41m on its lounge business and R54m on its technology solutions.
Comair is operating in increasingly tough conditions, with an oversupply in domestic flights matching the slowdown in SA’s economy.
Regionally, Southern Africa’s aviation industry is expected to report a collective $300m loss during 2018, while the industry in the rest of the world is likely to return a $33.8bn profit over the same period, according to data from the Airlines Association of Southern Africa.
Infinea CEO Fred Baumhardt says the idea is to bring leading and inexpensive aviation platforms into Africa using local support, while “empowering local engineers with global skillsets”.
“[The joint venture] is an opportunity to benefit the entire aviation ecosystem, from customers through to other airlines and airports,” said Baumhardt.