Comair expects financial hit from 737 MAX grounding, but is filling the fleet gap

14th June 2019 By: Rebecca Campbell - Creamer Media Senior Deputy Editor

South African private-sector airline group Comair has suffered financially from having to ground its newly delivered Boeing 737 MAX airliner earlier this year, following two fatal crashes involving the type in just five months in late 2018 and early 2019, which killed 346 people.

“We’re obviously looking to Boeing for compensation for financial losses,” says Comair airline division executive director and joint CEO designate Wrenelle Stander. “The grounding has affected us. It will have an impact on our financial performance.”

“We had taken delivery of one 737 MAX, which was in operation for about three weeks,” she adds. “We were about to take delivery of a second 737 MAX, when we voluntarily grounded the type. But we are working around it. We have had to lease in aircraft to fill the gap.” The airline has ordered a total of eight 737 

MAXs to help replace its ten ‘Classic’ genera­tion 737-400s. Comair also owns nine ‘Next Generation’ 737-800s and has long-term leases on another seven 737-800s. (The 737 series can be divided into the original generation, the ‘Classic’ series, the Next Generation and the MAX series.)

Comair operates both the British Airways brand in South Africa and the Kulula low-cost airline. Its fleet is composed entirely of different models of the 737 single-aisle airliner. Its total fleet numbers, on paper, 26 aircraft, including the 737 MAXs. The company needs a minimum number of 25 aircraft to be able to operate. 

This number is normally divided into 21 air­liners on operations, two spares (in case of any technical problems with any of the aeroplanes rostered to operate services), and two aircraft undergoing heavy maintenance.

Over and above the 737 MAX groundings, a number of the company’s aircraft recently also suffered lightning strikes or bird strikes, requiring unscheduled maintenance. “The number of bird strikes in the past few months has been unprecedentedly high,” she reports. To replace the grounded 737 MAXs, the airline has had to lease two aircraft, while, to fill the gap created by unexpected bird strike damage, a third aircraft has also had to be leased. All three leased aircraft are 737-300s, ‘Classic’  models of the 737 series, but smaller than Comair’s own 737-400s.

“The 737-300s have a smaller seat capacity, which reduces the number of seats we can sell,” she observes. 

“Also, they are less fuel efficient than most of the 737s in our own fleet, and much less fuel efficient than the 737 MAXs, so they are more expensive to operate. Furthermore, these are short-term leases, called wet leases, with the lessor supplying the flight crews for the aircraft, which are costly. 

“The cost of a wet lease is twice as expensive as that for a long-term lease per block hour (which is a measurement of flight time).”
Stander affirms that passengers have not seen any difference in Comair’s services. Indeed, the company has dramatically increased its on-time performance over the past six months from the low 60% range to the high 80%s. During the first half of May, the aver­age was in the 90% range.

Regarding Comair’s maintenance contract with Lufthansa Technik Maintenance International (LTMI), this, she explains, will start with the airline’s new aircraft, including its new 737-800s, which will come straight to LTMI for line mainte­nance. Regarding the existing fleet, the line maintenance would be transferred from South African Airways Technical (SAAT) to LTMI over two years. Eight aircraft would be transferred in 2020, and the final eight in 2021. “But we will still work with SAAT,” she highlights. “They will continue to provide technical support for us at outstations like Harare. We also hope they will continue to do C checks (major annual or biennial – depending on hours flown – base maintenance) for us. Currently, we do quite a few C checks in Europe, which is expensive.”