Passengers on Kulula.com, the no-frills budget airline, may find themselves being led to their aircraft by a character in tights and a garish, close-fitting T-shirt. As the self-styled airline for "superheroes", Kulula pushes the "up, up and away!" image for all it's worth.
Comair, Kulula's owner, must wish it could bottle some of that "up, up" for itself. Earnings and share price have gone down, down in the past year.
The airline has already warned that results for the year to June 2002 will be hurt by a combination of the weak rand and airline industry overcapacity, and has reduced flights accordingly. Despite forecasts of a medium-term return to profit - "if" the rand behaves, "if" oil prices stabilise and "if" market overcapacity is corrected - prospects for the current year are a "significant decline in headline earnings or possibly a marginal loss for the full financial year".
Only marginal? Most airline executives around the world would kill for prospects like that. The September 11 attack on New York's World Trade Center put the wind up passengers everywhere and slashed airline income. Many carriers are in serious financial difficulties.
SA, as a travel haven away from terrorism targets, has suffered less than most markets. But challenges there have been. The introduction of Kulula.com led to a price war with SA Airways. Though the lure of R400 tickets between Johannesburg and Cape Town lifted Comair turnover, it didn't do the same to earnings, which were halved.
Just as Comair has outperformed the airline industry at large, so other transport groups have come in ahead of the game despite unhelpful market conditions and an uncertain economy.
Take Avis. The company's Scandinavian car-hire operations, bought in 2000, are already exceeding expectations. Group CE Grenville Wilson says buoyant economic conditions in Norway and Sweden have helped offset tough trading conditions in southern Africa. The rand's weakness means their foreign-currency contribution is particularly valuable, and Avis is looking for more offshore licences. "There is every indication that Scandinavia's contribution is sustainable and that we can expect 25% of the group's net profit to be generated outside the rand monetary area by next year," says Wilson.
There was an added bonus for Avis early this year when an arbitrator ruled it had overpaid by R22m for Avis Norway, and ordered the Schoyen Group, the previous owner, to return the money. The difference was the result of under-depreciation of vehicles before the SA company bought the business.
September 11 was also raised as a potential cause of business downturn for the SA car rental market. Imperial Group was one of the first to raise the alarm, warning that earnings forecasts for its car rental and tourism divisions would have to be "tempered". On the face of it, warnings of a resultant severe decline in inbound tourists seem to have been overstated. Far more damaging, in the car rental market at least, has been the fierce price war among a growing number of competitors, which has depressed margins.
Imperial Group has found the past few months challenging. At the time of writing, the share price was down nearly 20% over 12 months. At around R52, there's no comparison with 10 years ago, when the share was at R6, but it's also a comedown from the 2000 peak of R78.
As a diversified transport group - activities include car rental and leasing, vehicle retail, forklift distribution, tourism and aircraft leasing - Imperial has plenty of hedges against seasonal swings. But even though most divisions report growth, and expect it to continue, some analysts say there has been a subtle shift in investor sentiment about Imperial.
One reason is the perceived lack of a top management succession plan. CEO Bill Lynch says there are strong divisional managers and that he plans to be around for a few more years. But so strongly is he associated publicly with the company, it's perhaps not surprising that there should be jitters as he approaches his 60s with no obvious successor (Carol Scott, maybe?) in sight.
One of last year's big changes in the transport sector was the realisation by some companies that transport alone was not their future. To make money in a tough market, they had to expand into supply-chain management. In other words, it was no longer enough just to carry goods: they had to manage clients' entire supply chain. Assets and trucks gave way to logistics and technology.
Two listed companies to benefit from this transition have been Unitrans and Super Group. Both increased turnover and margins in a market typified by rising fuel costs and increased competition.
Super Group's interims in the current financial year showed a 17% increase in revenue, at R2,6bn. Chairman Larry Lipschitz says the company has also benefited from shedding noncore assets such as Genesis Financial Services and BBR.
A company in which Super Group didn't sell its stake, but probably wishes it had, is failed microlender Unifer, in which it held nearly 20%.
At Unitrans, the only real disappointment has been the performance of the Hertz car rental division, which lost R2,4m in the first half of the current financial year. Otherwise, says an analyst, the group's performance remains "boringly solid". Unitrans CE Jo Grové prefers to call it "outstanding". But though the adjectives are miles apart, the sentiments aren't. Unitrans remains a low-risk performer. Add high potential to that, says Grové. "Due to the nature of its long-term contracts, we expect that the transport and logistics services division should continue to perform well," he says. He's particularly bullish about the expansion into Africa, which will allow Unitrans to grow hard-currency earnings.
The flexibility that has benefited landlubbers like Unitrans and Super Group has also worked for shipping group Grindrod. Under MD Ivan Clark, its shift to logistics has done wonders for the bottom line and share price. Low dollar freight rates, brought about by a global overcapacity of shipping tonnage, were countered in the year to December by the weakening rand, allowing shipping operations to increase headline earnings by 72% to R94m.
The shift into freight management - to counter shipping cycles - bore fruit with a R17m profit. Among the projects in which Grindrod is involved is the R60m Ticor bulk terminal project in Richards Bay. The terminal, in which P&O Ports and Worldwide Africa Investment are partners, is due for expansion this year.
Grindrod argues the shipping market should recover soon from what the company believes is a cyclical low. It had better be right. Much of the current capital commitments of R561m is for new ships.
Then there was Bell. It's hard not to feel a little sorry for this manufacturer of heavy equipment. Trade in the stock is limited and the company - a steady, rather than spectacular, performer - doesn't court headlines. It got them this year, for the wrong reasons, when it hired disgraced former SA cricket captain Hansie Cronje in its financial division.
That news shifted attention away from Bell's 2001 performance. Though exports didn't achieve the hoped-for 50% of total sales, they did enough to benefit from the weak rand and push total sales 8% over budget. Revenue rose to R1,658bn from R1,439bn in 2000.
The share price, at the time of writing, was just above R8. FM deputy editor Michael Coulson lamented recently: "It's sad to think that one could have bought any number of shares for well under R1 in 1997-1998, when Bell was in trouble."
Talking of bells, they tolled last year for one of the best-known stocks in the JSE's transport sector. Toyota SA's 37-year presence ended last July ahead of Toyota Japan taking control of the company. The delisting was a precondition of the takeover, in which the Japanese will take between 70% and 80% of the company. Wesco, the family trust controlled by the Wessels family, which has run Toyota SA since it was founded in 1961, becomes the minority shareholder.