1time Holdings has denied rumours that the airline is going under or that it is merging with Velvet Sky, after announcing that Excalibur Aerospace has acquired a 29,6% stake in the company.

Excalibur recently purchased 83 million shares in 1time Holdings – at 45c a share for R37,35 million – to be effected over a four-month period.

“Excalibur is buying into 1time Holdings because it is a great business with great opportunities, not because of industry rumours created by competitors,” says CEO of 1time Airline, Rodney James.

“Why would a company buy a significant share of a company that is going under? It does not make sense. Our competitors have been telling the industry for eight years that we’re going under. How much longer will the industry continue to believe them?”

Chairman of Excalibur Aerospace, Stephen Nthite, says the opportunity to buy a stake in 1time presented itself at a time when Excalibur was putting in place strategies to grow its footprint into sub-Saharan Africa. He says the share price discount to nett asset value of the company, coupled with its 15% market share, have been key considerations.

“1time has been the fastest-growing domestic airline for the last six years. During the past two years, the airline itself has performed well, growing revenue and passenger numbers in what is generally regarded as a flat market. It has borne up well against high fuel and airport costs,” Nthite says. 

Although 1time had reported a R21,3 million interim headline loss to June it is expecting further passenger growth in excess of market growth this year and will expand its reach into Africa and increase its frequencies in domestic air travel, he adds.

1time’s recent underperformance was attributable to ‘the three negatives’ of a R56m increase  in the fuel price, a R12m increase in airport charges and poor demand in the general travel and tourism sector, the airline said.

Excalibur Aerospace owns low-cost carrier, Velvet Sky. The company announced it would take over operations of the airline from Macdonald Holdings in July.

But James says the agreement with Excalibur will not lead to a conflict of interest between the low-cost carriers. “1time operates 1 300 flights a month and carries two million passengers a year, which equates to about 15% of the domestic market. The airline has a fleet of 12 MD80 aircraft, the group generates R1,3bn turnover annually; employing 1 100 staff countrywide. I don’t think a start-up airline with a couple of aircraft has the ability to conflict with the airline’s position in the market.”

Meanwhile, 1time Holding’s CEO, Glenn Orsmond, told said that no discussions had been held with Velvet Sky regarding any possible merger or commercial agreement.
“The deal is positive for 1time Holdings as it eliminates the overhang of shares in the market, significantly strengthens the shareholder base, and gives the group access to capital to fund future growth,” he says.

James elaborates: “1time will continue to grow and strive to maintain its position as the fastest growing airline in South Africa. We will be expanding our flight schedule, regionally and domestically, including Lanseria. Our strategy is to grow our routes and corporate market share.”

Excalibur’s shares will be acquired from the five original founding members of 1time Airline; Rodney James, Michael Kaminski, Sven Peterson, Gavin Harrison and Glenn Orsmond.

Current directors James, Kaminski and Orsmond will continue to retain a significant stake in the company. Furthermore, the acquisition does not affect the management teams or operations of the two subsidiaries, with James remaining as CEO of 1time Airline, Rinesh Ramkissoon, CEO of Aircraft Maintenance Business, Safair Technical, and Blacky Komani as Group CEO from October 1.