1time Airline posts 35.4m rand loss in first half

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South Africa's 1time Holdings has posted a first-half headline loss of 35.4 million rand ($4.1 million), compared with a loss of 21.3 million rand during the same period last year.

It blames the poor result on subsidiary 1time Airline's failed launch of two new routes in early 2012 - Lanseria and Mombasa - which created losses of 16.8 million rand and 8 million rand respectively.

A 30% increase in operating costs - driven mainly by fuel, airport and ground handling charges - was only partially offset by an 11% increase in revenue during the six months, further impacting the bottom line.

Maintenance division Jetworx also dragged down the group's performance, following its 12% revenue slump to 123 million rand. This resulted in first half losses of 29.6 million rand at the unit, compared to an H1 2011 profit of 17 million rand.

The parent company attributed Jetworx's reversal of fortunes to fleet consolidation at 1time Airline as well as the loss of a major third-party customer.

In August, 1time Holdings filed for business rescue (BR) under Chapter 6, Section 129 of the Companies Act - an analogous move to seeking Chapter 11 bankruptcy protection in America - and the group says negotiations continue with its creditors.

"We are confident that the turnaround strategy for the group that the BR practitioner is compiling at present will get the necessary approvals in order for the group to return to liquidity and sustainability," it says.

"We are expecting higher demand in the second half of the financial year and with the continued support of the South African public have been experiencing very good load factors."

1time Holdings received approval from shareholders for a new rights issue at its annual general meeting on 27 July, though creditors have yet to approve the capital raising move.