Johannesburg — THE consistent strong rise in demand for low-fare airline kulula.com's services is believed to be the main driver of the significant turnaround that its owner Comair expects to report in the year to June.

Comair, which also operates British Airways flights in SA, said this week that it expected to report positive earnings a share for the year to June, after two years of losses.

The group attributed the expected improvement mainly to record passenger numbers for both airlines, and increased efficiencies stemming from the group's fleet modernisation plan.

Comair has added seven aircraft since early last year. The newer aircraft typically use up to 40% less fuel than their older counterparts, Comair financial director Erik Venter said. Fuel costs comprise about a quarter of Comair's costs.

The increase in the fuel price during the year was partially offset by a surcharge on British Airways flights, Venter said.

A sector analyst said the turnaround had to be seen against the backdrop of the group's fleet revaluation in the previous financial year, which led to an impairment charge of R115m.

He said the bulk of Comair's growth -- earnings of 16c-17c were expected in the year to June, compared with a loss of 24,4c in the previous year -- would come mainly from kulula.com's performance.

It is Comair's policy not to provide a breakdown of figures between the two airlines, for confidentiality reasons.

Kulula.com reported record online ticket sales of R75m in November -- double the figure achieved in the same month in 2003.

It also introduced its low-fare services on several new routes during the year to June. Corporate travel deals with Sasol, Metropolitan and Sanlam also boosted revenues.

Comair expected headline earnings a share of 15c-16c compared with 12,1c in the previous year.

The group would release its full year results in September. Comair's share price decreased 4,83% to R1,58 yesterday.