Comair (South Africa) (CAW, Johannesburg O.R. Tambo) says it has acquired Star Air (South Africa) (BRH, Johannesburg O.R. Tambo) as part of its revenue diversification plan.
Founded in 2007, Star Air is a Part 121 certificated carrier specializing in the wet, dry, and damp leasing of aircraft to airlines in Africa on short to medium term contracts. It operates a fleet of five B737-300s (of which three are wet-leased to Comair) and four B737-300(F)s. Aside from carrier operations, Star Air also has its own AMO which, through its hangar at Johannesburg O.R. Tambo, meets its own in-house maintenance requirements (up to a C-Check) as well as those of third parties.
In a stock market filing on May 31, Comair said it had entered into an agreement with Sundrops Investments Proprietary Limited, Smashing Star Investments Proprietary Limited, and Marcel Liebenberg to acquire all shares and claims in Star Air Cargo Proprietary Limited and Star Air Maintenance Proprietary Limited for ZAR75 million rand (USD5.14 million) plus profit share payments, the sum of which is capped at ZAR250 million (USD17.14 million).
"Comair has acquired the Assets to extend its diversification strategy into the leasing of aircraft, while also providing Comair with the expertise and systems to establish a base for heavy maintenance checks on its fleet of B737-800 aircraft," it said.
Star Air's board must approve the sale and provide Comair with the corresponding resolution by no later than June 30.
As a precursor to this announcement, Comair said last week that Glen Orsmond, Star Air's chief financial officer and former 1time airline group chief executive, had been appointed co-CEO of Comair effective July 31, 2019. Orsmond will be responsible for looking after Comair's non-airline business and financial services while Wrenelle Stander will oversee its airline operations.
"The new CEOs’ task will be to optimise our airline business performance whilst also building on the diversification strategy that has been central to the Group’s growth in stagnant market conditions," Board chairman Piet van Hoven said in a statement. "The Group is less reliant on the notoriously volatile airline businesses, which are so dependent on the performance of the broader economy. These other businesses now contribute 30% of profit."
Aside from its two airline units - a British Airways franchise and its Kulula Air low-cost brand - Comair has a variety of other interests in the tourism and hospitality industries, a training academy with a global customer base, as well as a business providing technical support and solutions for the tourism, travel and aviation sectors.
