flyafrica.com CEO Adrian Hamilton-Manns Discussing Expansion into Africa

Air Zimbabwe 767-200 Flight from Harare International Airport (HRE) to Johannesburg OR Tambo (JNB)

Restructuring of Fly 540 Angola and Ghana

 

fastjet, Africa’s low cost airline, today confirms that as previously announced, two of its loss-making Fly540 businesses are being restructured with the objective of increasing shareholder value. The Fly540 businesses operate on a traditional airline model and not the fastjet low cost model.

 

After a detailed evaluation of the potential of Fly540 in both Ghana and Angola, fastjet has concluded that, although these countries present very significant long-term opportunities for the fastjet low cost model, in the short term fastjet intends to fully focus on the considerable potential of opportunities in East and Southern Africa. 

 

As a key part of the restructuring, two group-owned ATR aircraft previously operating in Ghana and Angola have been taken out of service and are currently in the process of being sold.  While a leased aircraft continues to operate in Ghana, the Angolan operation has been temporarily suspended, pending the return to service of two leased aircraft on completion of required maintenance.  Further details on the restructuring of both 540 operations will be announced in due course.

 

Fastjet interim chairman and CEO, Ed Winter, said: “Management has been carefully considering how best to restructure the Fly540 business which we inherited and this is a highly significant and very positive development in that process.

 

“We are currently focused on expanding the low cost fastjet network in East and Southern Africa by establishing bases in Zambia, Kenya and South Africa and these plans are progressing well.  However, our overall vision is to create a pan-African low-cost network and, as such, launching the low cost fastjet model in both Angola and Ghana remains firmly part of the Company’s long-term plans.”

Emirates Group Announces 26th Consecutive Year of Profit

 

§  Group records AED 4.1 billion (US$ 1.1 billion)  profit; makes largest-ever investment in the business at AED 22.0 billion (US$ 6.0 billion)

 

§  Emirates makes profit of AED 3.3 billion (US$ 887 million), as revenue increases 13% to AED 82.6 billion (US$ 22.5 billion)

·         Largest-ever capacity increase of 5.9 billion ATKM in airline’s history

 

§  dnata makes profit of AED 829 million (US$ 226 million), as revenue increases 14% to AED 7.6 billion (US$ 2.1 billion)

·         dnata invests a record AED 850 million(US$ 232 million)

 

The Emirates Group today announced its 26th consecutive year of profit and company-wide growth, ending the year in a strong position despite competitive pressure and a global economic environment that is only slowly recovering. The financial year ending 31 March 2014 also marked an unprecedented level of investment across the Group, continued expansion of its global footprint, and the achievement of new capacity milestones.  

Released today in its 2013-14 Annual Report, the Emirates Group posted an AED 4.1 billion (US$ 1.1 billion) profit, up 32% from last year. The Group’s revenue reached AED 87.8 billion (US$ 23.9 billion), an increase of 13% over last year’s results, and the Group’s cash balance remained strong at AED 19.0 billion (US$ 5.2 billion).

 

“Achieving our 26th consecutive year of profit in a financial year marked by record increases in capacity and significant business investments across the Group, is testimony to the strength of our brands and our business fundamentals,” said His Highness (H.H.) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.

 

“Throughout 2013-14 the Group has collectively invested over AED 22.0 billion (US$ 6.0 billion), the highest amount ever in one financial year. We know that to be a sustainable and profitable business we have to keep adding value to our stakeholders, our customers, partners and employees. To do this, we need efficient new aircraft, quality products and services, and cutting-edge facilities. Every dirham invested has been carefully considered against short and long-term goals - be it enhancing our capabilities, improving our product, or expanding our business footprint.”  

 

The Group also continued to invest in and expand on its employee base, increasing its overall staff count by 11% to over 75,000-strong representing over 160 different nationalities, across its more than 80 subsidiaries and companies. Revenue per airline employee increased by 4% to AED 1.9 million (US$ 0.5 million).

“We are moving into the new financial year with confidence, and a strong foundation for continued profitability with our strong balance sheet, solid track record, diverse global portfolio and international talent pool,” said Sheikh Ahmed. “Operating in a dynamic and highly-competitive environment means we have to stay agile, and work even harder to meet and exceed our customers’ expectations. With the help of our 75,000 strong multicultural workforce, we have no doubt that we will be able to capitalise on the opportunities in the year ahead.” Similar to the last financial year, the Group declared a dividend of AED1 billion (US$ 280 million) to the Investment Corporation of Dubai.

 

Emirates performance

In 2013-14, Emirates increased capacity by 5.9 billion Available Tonne Kilometres (ATKMs), the largest capacity increase in the airline's history in a single year. This brings Emirates’ total passenger and cargo capacity to 46.8 billion ATKMs at the end of the financial year. The airline also marked a new record of over 1 million block hours in terms of fleet production. 

 

Emirates received 24 new aircraft during the year, including 16 A380s, six Boeing 777-300ERs and two Boeing 777Fs, bringing its total fleet count to 217. The airline remains the world’s largest operator of the Boeing 777 and A380 – both aircraft being amongst the most modern and efficient wide-bodied jets in the sky today. With the delivery of new aircraft, Emirates launched nine new destinations: Boston, Clark, Conakry, Haneda, Kabul, Kiev, Sialkot, Stockholm and Taipei, as well as a new service between Milan and New York. 

 

Emirates revenue for the first time surpassed AED 80 billion, at a new record of AED 82.6 billion (US$ 22.5 billion). While the average price of jet fuel remained high, it was slightly lower compared to last year and has supported Emirates’ bottom line improvement.

 

Emirates’ fuel bill increased by 10% over last year to reach AED 30.7 billion (US$ 8.4 billion). Total operating costs increased by 12%, compared to a revenue increase of 13% over the 2012-13 financial year. The airline successfully managed increased competitive pressure across all markets to record a profit of AED 3.3 billion (US$ 887 million), an increase of 43% over last year’s results, and a healthy profit margin of 3.9%.  

 

Carrying a record 44.5 million passengers, up 13% from last year, Emirates maintained a robust Passenger Seat Factor at 79.4%, nearly consistent with last year’s results in spite of a 15% increase in seat capacity by Available Seat Kilometres (ASKMs). This highlights the strong consumer desire to fly on Emirates’ state-of-the-art aircraft. Passenger yield remained steady at 30.4 fils (8.3 US cents) per Revenue Passenger Kilometre (RPKM). 

 

Emirates also improved its premium seat factor despite lingering economic uncertainty and strong competition in many markets. Premium and overall seat factor for the airline’s flagship A380 aircraft outperformed the network, underscoring the popularity of Emirates’ premium and A380 product amongst passengers.  

 

Over 18 million passengers had flown on an Emirates A380 when the airline marked its fifth anniversary of A380 operations in August 2013. In 2013-14, Emirates introduced A380 services to Barcelona, Brisbane, London-Gatwick, Los Angeles, Mauritius and Zurich, bringing to 27 the total number of destinations served by its popular flagship aircraft. Emirates’ Los Angeles service is also the world’s longest A380 flight at 16 hours and 20 minutes.   

 

Highlighting its sound financials and investor confidence, Emirates raised a total of AED 12.0 billion (US$ 3.3 billion) through a variety of financing structures, mainly to secure its ongoing fleet expansion. Further, eight of the aircraft delivered in the financial year were funded through two corporate bonds issued in early 2013 which raised AED 6.4 billion (US$ 1.8 billion) in funding.  

 

Significant financing milestones achieved during the year include the issue of a second Enhanced Equipment trust Certificate through a lessor, which tapped into the US capital market to fund four A380s. Another major landmark was achieved through the refinancing of two A380s through the first ever floating rate capital market bond backed by a COFACE (the French Export Credit Agency) guarantee. Emirates closed the financial year with a healthy AED 12.7 billion (US$ 3.4 billion) cash flow generated from operating activities.  

  

Revenue generated from across Emirates’ six regions continues to be well balanced, with no region contributing more than 30% of overall revenues. East Asia and Australasia remained the highest revenue contributing region with AED 23.8 billion (US$ 6.5 billion), up 14% from 2012-13. Gulf and Middle East revenue increased 17% to AED 8.3 billion (US$ 2.3 billion), and Europe revenue increased 16% to AED 23.4 billion (US$ 6.4 billion), reflecting new destinations as well as increased frequency and capacity to these regions. 

 

Across the rest of the globe Emirates saw strong revenue increases from Africa up 15% to AED 7.7 billion (US$ 2.1 billion), The Americas up 11% to AED 9.2 billion (US$ 2.5 billion) and West Asia and Indian Ocean with AED 8.3 billion (US$ 2.3 billion) in revenue, up 3%. 

Focusing on customer touch points, Emirates opened a new dedicated airport lounge in Rome, and upgraded its lounges in Paris Charles De Gaulle, London Gatwick and Bangkok. Emirates also announced plans for a new 300-seat contact centre in Budapest to support future growth and supplement its language and response capability, and continued to invest in its onboard product including the installation of Wi-Fi and “live” TV.  

 

In its first full year of operations, the newly commissioned Concourse A at Dubai airport for Emirates’ growing A380 fleet witnessed a significant passenger throughput with 37% or 8.2 million Emirates passengers departing Dubai enjoying the new state-of-the art facilities, spacious lounge areas to board 27,000 flights. 

 

Looking forward to 2014-15, Emirates has to date announced five new passenger routes including Abuja, Brussels, Chicago, Kano and Oslo. Defying the industry trend, the 2013-14 financial year has been a strong one for Emirates SkyCargo who for the first time reported a revenue over US$ 3 billion to reach AED 11.3 billion (US$ 3.1 billion) mark, a 9% increase over last year.  

 

Contributing 15% of the airline’s total transport revenue Emirates SkyCargo continues to play an integral role in the company’s expanding operations. Emirates SkyCargo’s tonnage strongly increased by 8% to reach a remarkable 2.3 million tonnes in a flat and challenging airfreight market, highlighting its ability to grow revenues against the industry norm. This year, freight yield per Freight Tonne Kilometre (FTKM) decreased by 1%.  

 

At the end of the financial year, the Emirates SkyCargo freighter fleet had grown to 12 aircraft – ten on operating lease and two on wet lease. Emirates’ Destination and Leisure Management including hotels recorded revenue of AED 623 million (US$ 170 million), an impressive increase of 35% over last year. This positive development was supported by the first full year of operation of the JW Marriott Marquis Hotel in Dubai, the world’s tallest hotel. The second tower of the hotel will be fully operational later this year.   

 

dnata performance

 

In its 55 years of operation, 2013-14 has been dnata’s most successful yet, building on its very strong results in the previous year. dnata grew its revenue to AED 7.6 billion (US$ 2.1 billion), an increase of 14%, through organic growth and as well as strategic international acquisitions. For the first time in the company’s history, dnata’s international business accounted for 50% of its revenue.  

  

dnata also outperformed last year’s record profit to reach AED 829 million (US$ 226 million). 

 

In 2013-14, dnata invested a record AED 850 million (US$ 232 million) into its business, laying the foundations for future growth.  

 

Its key investments included: the development of dnata City – a 20-acre cargo logistics centre at London Heathrow Airport, additional warehousing capacity at seven airports across the UK, and capacity expansion of Freight Gate 3 at Dubai airport. 

 

dnata's international growth continued with the addition of several new companies in its portfolio including the acquisition of Broadlex, an aircraft cleaning service provider in Australia, and Gold Medal Travel Group, one of the leading distributors of long-haul travel products in the UK. dnata also acquired Air Chefs in Italy, by taking over the remaining 50% stake from Servair.  

 

Revenue from dnata’s airport operations increased strongly by 15% to reach AED 2.8 billion (US$ 774 million). It remains dnata’s largest revenue stream. The year’s performance was primarily driven by strong volume growth in the UK and Dubai, including first time handling operations at Dubai World Central where commercial passenger flights began in October, and also in a number of dnata’s other global operations including new services from Broadlex. dnata today handles 250 airlines at 27 airports in nine countries and is the world’s largest ground handler of the A380.  

 

dnata’s cargo handling division grew revenue by 8% to AED 1.2 billion (US$ 318 million), on account of increasing business volumes in the UK and additional road feeder services between both airports in Dubai. Dubai World Central now accounts for 30% of dnata’s cargo handling activities in Dubai.  

 

dnata’s catering business accounted for AED 1.8 billion (US$ 478 million) of its total revenue, up 25%. The inflight catering business uplifted more than 41 million meals during the year, a sharp rise of 44% on account of dnata’s consolidated operation in Italy as well as its growth in the UK and Australia. 

 

Revenue from dnata’s travel services division also saw strong growth of 22% to reach AED 662 million (US$ 180 million). This is mainly attributed to business growth in the UK through Travel Republic and the newly integrated business of the Gold Medal Travel Group as of March. The underlying travel services related turnover, measured by net sales value, increased 10% to AED 5.9 billion (US$ 1.6 billion).  

 

In 2013-14, dnata’s operating costs increased by 15% to AED 6.7 billion (US$ 1.8 billion), reflecting the first months of integrating the newly acquired companies across its airport, catering and travel businesses.   

 

Similar to last year, dnata’s cash balance of AED 2.4 billion (US$ 663 million) remains strong and the business delivered a solid AED 1.1 billion (US$ 307 million) operating cash flow in 2013-14.  

 

dnata’s employee strength increased to 23,000, a 14% growth which includes employees from its newly acquired companies. The majority of dnata’s staff, 60%, are based in UAE.   

 

The full 2013-14 Annual Report of the Emirates Group – comprising Emirates, dnata and their subsidiaries – is available at: www.theemiratesgroup.com/annualreport

 

PICS: Harare International Airport

Check-in for KLM KL523 HRE-LUN-AMS

 

 

An empty departures lounge, pretty common in the evenings

 

 

Malawi Airlines Boeing 737-800 taxiing out for its return back to Lilongwe

 

 

KLM KL523 Airbus A330-200 shortly after its arrival at Harare Int Airport

 

 

Egyptair MS842 departing for Cairo via Dar es Salaam

 

 

Special thanks to Léonard Desdoigts for the great pics and trip KLM523 Trip Report HRE-LUN.



British Airways (Comair Limited) Shortly After Takeoff from Harare, Flying Over Chitungwiza

British Airways (Comair Limited) Boeing 737-300 shortly after takeoff from Harare Int Airport on the way to Johannesburg OR TAMBO flying over Chitungwiza. Once again special thanks to William Whaley on Airlners.net.

VIDEO: Fastjet to Expand Route Network to include HRE, EBB, NBO, MBA Over The Coming Months

PICS: Harare International Airport - 04/13/14

 

LAM Mozambique (TM342) Bombardier Q400 arriving in Harare Int Airport from Maputo via Beira.

Emirates EK713 Airbus A340-300 arriving at Harare Int Airport from Dubai via Lusaka.

 

South African Airways (SA28) Boeing 737-800 readies for boarding while in the distance SA Express (XZ1613) CRJ200 and Kenya Airways (KQ780) Embraer 190 await departure. Although pretty hard to spot through the aerobridge glass is Egyptair Boeing 737-800 parked for the day awaiting its evening return flight to Cairo via Dar es Salaam. 

 

Special thanks to Paul Chikwanda for providing the pics.

Emirates reduces flights to 41 destinations for 80 day period, maintains services to all existing points

 

• Flight operations adjusted to accommodate necessary traffic reduction at Dubai International, no impact on customers booked to fly
• Estimated AED 1 billion hit to revenue
• Grounded aircraft allows operational flexibility for airline’s own “upgrading” projects 

Emirates, which flies daily from Harare to Lusaka and Dubai, will continue to serve all of its worldwide destinations during the 80 day period of runway upgrading works at Dubai International starting 1 May. However, it has had to reduce flights to over 40 destinations, and change timings on some of its flights.

 

These changes will not impact customers booked to fly between May and July, as the flight schedules have been planned and implemented months ahead of time. Customers or travel agents searching for flight options on Emirates will only see those flights that are available. “Customers who have booked to fly with us, or are considering to fly with us during this time, can be assured that it is business as usual. On routes where Emirates has had to reduce frequency, we have upgraded to bigger aircraft where possible to recover part of the capacity. We have done a lot of preparation work behind the scenes together with all airport stakeholders, to ensure that there will be as little inconvenience to our customers as possible, and we look forward to resuming our full schedule of flights in July,” said Tim Clark, President Emirates Airline.

 

“As the biggest operator at Dubai International accounting for about 50% of traffic, of course we have had to take the biggest hit in reducing flights. There will be an impact on our revenues to the tune of approximately AED 1 billion. However, we understand the need for this upgrading work to be done, and we support it wholeheartedly. It will add much-needed capacity to the airport, and having world-class infrastructure ultimately means a better experience for customers. So we have to take the long-term view and manage the short term pain,” he added. Emirates will ground 20 aircraft in May, 22 in June, and 22 in July, as Dubai Airports launch a comprehensive runway upgrade project which will see both runways at Dubai International close alternatively for resurfacing and other enhancement works.

 

During this time, Emirates has plans for its own upgrading projects, taking advantage of its “grounded fleet” to perform engineering maintenance and onboard enhancements, ensuring its award-winning fleet operates at top form. These works include phased upgrades to its GCS (Global Communications Suite), an initiative that requires approximately 2,200 man hours of mechanical and avionic work per aircraft. The parked aircraft also provides operational flexibility for an ongoing fleet-wide inflight entertainment system and cabin maintenance improvement campaign. In addition, the Emirates Engineering team will carry out its first-ever landing gear change to a Boeing 777-300ER aircraft, the start of a programme which will eventually involve over 70 other Boeing 777s. The landing gear change work occurs once every 10 years in the aircraft’s lifespan.

 

All Emirates passenger flights will continue to operate from Dubai International Airport (DXB) during the runway upgrading period from 1 May – 20 July, while its freighter operations will move to Al Maktoum International at Dubai World Central (DWC) on 1 May as planned.

The Big & Small at Harare International Airport

Ethiopian Airlines 787 taxiing out while Malawian Airlines dash8 Q400 taxies in at Harare International Airport. Special thanks to Airway Magazine for the pic.

South African Airways takes delivery of fourth new A320 aircraft

 

South African Airways (SAA) took delivery this week of a further two new A320 aircraft, bringing the total number of narrow bodied aircraft to join the SAA fleet this year to six. The latest two A320s arrived earlier this month, with another A320 (number five) expected in June this year. Aircraft six and seven are expected to arrive in the third quarter and aircraft eight in the fourth quarter. Two of the A320s entered service last year.

Fleet renewal forms part of the three key pillars of the successful implementation of SAA's new strategy, Gaining Altitude. The fleet replacement programme for SAA’s narrow-bodied fleet includes the acquisition of twenty A320 aircraft, which will replace all the Boeing 737-800 aircraft and increase the fleet to support SAA route expansion plans into Africa. “We are very excited about the latest new arrivals in our fleet, which brings our customers the added pleasure of flying on brand new, aircraft. Besides the improved on board offering, customers can enjoy their flying experience knowing that they are travelling with a more fuel efficient aircraft and thus part of the airline’s commitment to being an environmentally responsible airline,” says Kendy Phohleli, SAA  General Manager Commercial (Acting).

In keeping with SAA’s initiatives towards weight reduction, products and material on the new A320’s are made of lightweight materials. “We have put a lot of work into making the Business Class on these aircraft attractive and super comfortable for customers. These aircraft further offer a refreshed on board experience through a number of special features,” says Myriam Bracke, Manager Product.

Interior design of the cabin
The interior design of the cabin reflects on SAA’s truly South African nature with earthy touches of African colours and ‘elements of surprise’, often seen in South African designs. Materials used are durable leather for the seats and a mix of nylon and wool for the carpets offering lighter and stronger fixtures. Wood look finished floors and the SAA logo in the welcoming area are more special touches.

 

Configuration
Aircraft are configured with 24 Business Class and 114 Economy Class seats.

Economy Class
Seating in economy class offers a pitch of 31 inches, with shared USB and PC power points and an adjustable headrest. Customers can enjoy a greater sense of living space these slim-line seats offer, which have been upholstered in easy to maintain leather throughout the cabin. Colours used are dark beige and anthracite grey with touches of red and blue corporate colours.

Business Class
Business class offers ample leg room with a pitch of 39 inches, and seats are arranged with two seats either side of the aisle (four abreast) offering more seat width. The A320s are the first narrow body aircraft in the SAA fleet to offer four seats abreast, offering more space and comfort, in comparison to the five seats abreast on the B737s and A319s. Every seat has a leg rest, and an adjustable headrest, with a recline of about 7 inches allowing the seat to fold out into a cradle position offering super comfort for up to four hour long regional trips. Seats have loads of stowage on the sides, which gives extra width.

“Business class seating offer a 10% improvement on pitch compared to our current business class offering on narrow body aircraft, giving our competitors in the domestic market a run for their money.” A class divider between economy and business class in curtain material with a basket weave print reflects on the South African theme. Mood lights in light blue (on the hand rails) add the final touch to the superb interior ambience of these aircraft. A magazine rack which complements a ‘wrap around’ design will be installed by SAA.

Stow your tablet
All the seats (except for the first row) have an innovative special feature: the back shell has space to stow a PC tablet, with a USB powerpoint that keeps a tablet powered during the flight, and PC power points in the centre console for additional laptop computer power. “These Business Class seats are a customised design for SAA and we are truly proud of offering our customers this initiative. It is an airline first,” says Myriam Bracke. In the pipeline are Samsung tablets, with in flight entertainment content already loaded, which will be offered to business class travellers on longer African flights.

In flight entertainment
Customers can watch the in flight entertainment on the classic drop down overhead screens and can look forward to improved quality of flight entertainment experience as well as Airshow’s moving map experience, new on these narrow bodies. As a future innovation SAA is testing new IFE technology where content will be streamed on board to customers’ own devices.

Fuel efficiency
In a market environment where jetfuel has become the single biggest cost factor for any airline, the A320 has become the aircraft of choice for airlines looking to reduce their fuel bills.  Newer aircraft embody the latest technologies, are also more reliable, more productive and require less down-time for maintenance and repairs.  Lower fuel burn means fewer carbon emissions and with the A320's low noise footprint, it's a good neighbour too.

For SAA, where the A320 comes into its own is through its high degree of flight deck operational, training and technical support commonality with the other Airbus types in the fleet, notably its shorter sister, the A319, but also its bigger long-haul cousins, the A330-200 and A340s.

fastjet plc - Placing, Open Offer, EFF, Trading & Brand Licence

 

 

Fastjet Plc. (AIM:FJET) is pleased to announce a placing with institutional and other investors to raise gross proceeds of £11 million, an amendment to the terms of the Company's brand licence with easyGroup Holdings Ltd. ("easyGroup"), an open offer to shareholders of up to £4 million, an update on current trading, and the termination of the Company's Equity Finance Facility ('EFF') with Darwin Strategic Limited.

 

Placing

 

The placing involves the issue of 687,500,000 new Ordinary Shares (the "Placing Shares"), amounting to approximately 112% of the existing issued share capital of the Company, at a price of 1.6 pence (the "Issue Price") to raise gross proceeds of £11 million.  The Issue Price represents a discount of 11.1 per cent. to the closing middle market price of 1.8 pence per Ordinary Shares on 9 April 2014.

 

Directors & Senior Management Participation

 

Certain Directors, specifically Mr. Edward Winter and Mr. Angus Saunders, and senior managers of the Company have subscribed in the Placing for Placing Shares with an aggregate value of approximately £1 million, which constitutes both dealing by individuals concerned and in so far as these Directors are concerned a related party transaction for the purposes of the AIM Rules, further details of which are set out in the section headed 'Directors Dealing & Related Party Transaction' below.

 

easyGroup

 

The Company has a Brand Licence agreement with easyGroup for the use of the fastjet brand in return for a royalty payment.  easyGroup IP Licensing Limited has agreed to invest £1 million in the Placing.  On the closing of the Placing easyGroup has also agreed with the Company to terminate the management consultancy fee under the Brand Licence in exchange for the receipt of 94,287,227 Ordinary Shares in the Company (the "easyGroup Shares") with a value of approximately £1.51 million at the Issue Price, resulting in the cessation of previously agreed cash payments equating to approximately £4.3 million over the next eight years.

 

Termination of Darwin EFF

 

The Company announces that is has terminated the Equity Financing Facility ('EFF') with Darwin Strategic Ltd. which was originally announced on 13th June 2013 and further extended on 12th March 2014.  This facility has served the Company well over the past year, providing capital to allow the Company to successfully reach its current position from where it can now expand, but is no longer required to finance further growth.

 

Current Trading and Prospects

 

The Company expects to publish its financial statements for the year ended 31 December 2013 in June.  The Company had continued to trade in line with management expectations since 30 June 2013.  The Company expects, for the full group including the Fly540 operations,revenue for the year ended 31 December 2013 to be approximately $53 million and the operating loss before tax and exceptional items is expected to be approximately $47 million.  Further impairments in relation to the Fly 540 businesses during the remainder of the year are not expected to exceed $25 million.  The restructuring of the Fly540 operations is very well advanced and will be completed shortly. During 2013 less than $650,000 of fastjet Plc cash was utilised in the legacy Fly540 operations.  The proceeds of the fundraising will provide the Company with the necessary capital to expand its low cost airline operation in Africa as outlined in Background to the Fundraising

 

Open Offer

 

In order to provide Shareholders an opportunity to participate in an issue of new Ordinary Shares on equivalent terms to the Placing an open offer at the Issue Price of up to 250,000,000 shares raising up to £4 million is intended to be made to qualifying shareholders.  A circular to shareholders setting out full details of the Open Offer and the actions to be taken by shareholders in respect of the Open Offer is expected to be published on or around 16 April 2014. The Open Offer is not being underwritten and is not conditional on the Placing. The open offer Circular will be published on the Company's website, www.fastjet.com, and posted to shareholders in due course and a further announcement made at that time.

 

Ed Winter, CEO and Interim Chairman of fastjet said:

 

·         "I am pleased that this fund-raising has been completed so successfully. It is clear that the low cost airline model is now established in Tanzania, with customer acceptance developing rapidly. Customer feedback is extremely positive, and ancillary revenue streams continue to see steady improvement.

·         We now look to move to the next phase of fastjet's expansion with further international routes, additional aircraft and more bases.  Securing the funding for management to fulfil that plan is a great step forward.

·         We appreciate the support of Sir Stelios Haji-Iannou and easyGroup, demonstrated both in their subscription to the Placing and their agreement to terminate the Management Fee in return for shares. I welcome the fact that the fastjet management team has shown its confidence in the business by joining me in making a very substantial personal cash investment in our company. The Darwin Strategic EFF that we have used for much of our funding to date, vital in bringing us to this point, has been a great partnership.

·         In response to many comments from shareholders over past months, I am also pleased that we have been able to offer all shareholders the opportunity of participating in this fund-raising on the same terms as the institutional placing.

·         I now look forward to leading the Company through the next phase of its development, to become the leading pan-African low-cost airline."

 

Sir Stelios Haji-Iannou of easyGroup said:

 

·         "I am delighted that Ed Winter and his team at fastjet managed to get such a successful backing from the City institutions, raising the necessary funds to get the company to the next level. I am happy to have also contributed myself in this effort. I looking forward to seeing the company offer even more people in Africa the same low fares that we all take for granted now in Europe."

 

Background to the Fundraising

 

·         fastjet plc is the holding company of the low cost airline fastjet which commenced flights under the fastjet brand in Tanzania in November 2012 using a fleet of three Airbus A319 aircraft.  By adhering to international standards of safety, quality, security and reliability; fastjet has brought a new flying experience to the African market at low prices. fastjet's long-term strategy is to become the first low-cost, pan-African airline. fastjet plc is also the holding company of Fly540, which operates in Kenya, Ghana and Angola.

 

·         The fastjet low cost airline was launched in Tanzania on 29 November 2012. fastjet operations in Tanzania carried a total of 31,500 passengers in February 2014 and achieved a load factor of 76 per cent. The average yield per passenger was $82, compared to $47 in February 2013.

 

·         fastjet currently has three domestic routes operating in Tanzania linking Dar es Salaam with Mwanza, Kilimanjaro and Mbeya and two international routes to Johannesburg and Lusaka.  During 2013, management successfully secured fastjet's first international route rights and fastjet's first international route, Dar es Salaam to Johannesburg, commenced operations on 18 October 2013 and its second international route from Dar es Salaam to Lusaka, Zambia commenced flights in February 2014. Services between Lusaka's Kenneth Kaunda International Airport and Dar es Salaam's Julius Nyerere International Airport operate twice a week with a third flight scheduled from 15 April 2014. fastjet expects to increase the frequency of flights on this route in line with consumer demand, as more people make use of its safe, affordable and on-time service.

 

·         38 per cent of fastjet's passengers surveyed six months after the commencement of the fastjet operation were first time fliers and in that period 34,000 seats were sold to those booking early at the base-price of only USD$20, so establishing the low cost model in Tanzania. In June 2013 over 1,200 seats were sold for USD$20 each and, importantly, over 300 seats were sold for USD$200 each or higher. It is clear that the low-cost airline model works in Tanzania and is effective in stimulating and growing the market with customer acceptance of the model developing rapidly. The booking window (days between booking and flight) has increased significantly with customers quickly adopting the "book early for cheapest seats" model. Due to the chronic unreliability of air services prior to the arrival of fastjet, the majority of passengers previously booked tickets on the intended day of travel once they were assured that the flight would take place.

 

·         Feedback on customer satisfaction during the period has been extremely positive, with 98 per cent of fastjet customers surveyed saying that they would fly with fastjet again and 100 per cent saying that they would recommend fastjet to friends and business colleagues.

·         In order to offset lower rates of commercial activity on the Internet and low credit card usage in Africa, management continues to develop cutting-edge customer communication and facilitation tools.  These include extensive use of social media such as Facebook and Twitter. Mobile phone penetration throughout Africa is very high and the fastjet website is optimised for use on smart phones.  fastjet customers increasingly use mobile phone payment methods such as M-Pesa and Tigo to pay for seats.  In December 2013, 19 per cent of ticket revenue was paid through mobile money.

 

·         Ancillary revenue streams, predominantly from baggage and flight change fees, continue to see steady improvement, increasing from USD$2.75 per passenger in January 2013 to USD$6.95 per passenger in December 2013.  Additional services such as in-flight retail, allocated seating, hotel and travel insurance services will be introduced with the objective that ancillary revenue will continue to rise, both in absolute terms and as a percentage of total revenue.

 

·         fastjet's Tanzanian operation, which comprises a well-recognised brand name and both domestic and international routes, means that it is now well placed to further develop its existing Tanzanian operations.  Management plans a controlled expansion, with all three aircraft fully optimised within the schedule by Q3 2014 with further international routes including routes to Kenya introduced by Q3 2014.  This will enable fixed overhead costs to be spread over a larger operation, a key factor in turning the fastjet operation profitable.  fastjet plans to add additional aircraft in 2015.  It also plans to establish bases in Zambia, Kenya and South Africa.  The Group is targeting to have 4 fastjet operational bases across Africa by 2016 and by 2018 to operate 24 aircraft, carrying approximately 6 million passengers per year with targeted revenues in excess of $500m.

 

Future Initiatives

 

·         Based on the Company's experience in Tanzania and Zambia it has confidence it can fulfil the strategy of becoming the pan African Low Cost Airline of choice.  The low cost model has stimulated the Tanzanian market in the same way other such markets in other areas of the world were stimulated by its introduction.  The Tanzanian consumer has embraced the brand and model with incredible speed and enthusiasm.  Lessons learned whilst establishing the current operations will be deployed to our advantage during our expansion into other markets.

 

·         In some countries, developing the fastjet brand will involve direct investment (as is the case in Tanzania), while in other countries it is may be via a licencing agreement.  Direct investment is most likely in larger, more mature markets, such as South Africa, Zambia and Kenya, with licencing agreements more likely in smaller, less well-developed markets and those with a difficult investment environment such as Nigeria.  fastjet plans to undertake direct investment in a planned and orderly way, such that a material portion of the required investment can be internally funded.

 

fastjet Airline Management Services

 

·         For countries where fastjet considers a licencing agreement to be the appropriate route to establishing the brand, we have developed an Airline Management Services (AMS) concept.  AMS facilitates the delivery of core elements of the fastjet service, such as, safety, brand, revenue management and sales and distribution channels, while other investors provide the capital required to fund the aircraft and start-up costs.  In addition, fastjet AMS would offer other optional commercial, operational and management services.  Discussions are on-going in a number of African countries, including Nigeria, with a view to launching airlines in this way under the fastjet brand.

 

Zambia

 

·         fastjet plc is in discussions with the Zambian government with the intention of creating a fastjet operation based in Lusaka.  The Board see the business and political environment in Zambia as very progressive and fastjet's discussions to date with the Zambian government, Tourist Board and other stakeholders have been very positive.  The Company believes the establishment of a fastjet operation would bring benefits to the country and Zambian people through the expansion of trade and tourism, as well as bringing safety and reliability improvements to the Zambian aviation industry.  The new operation, whilst being distributed and marketed as a part of the pan-African fastjet network, would be a Zambian registered company in which fastjet plc will have a substantial stake.  fastjet  flights linking Lusaka with Dar es Salaam have proved an instant success with customers previously enduring 28 hour torturous road journeys.

 

Ancillary Revenues

 

·         On 28 February 2014 the Company signed two agreements with partners in the travel industry, marking the launch of partner ancillary products on fastjet.com.  The first, with Rentalcars.com parent company, TravelJigsaw Ltd, will offer low-cost car hire in Africa through fastjet.com, and the second will deliver competitively priced online parking services in South Africa in partnership with Looking4Parking.com (L4P).  fastjet expect to announce further ancillary revenue opportunities in the near future.

 

Use of Proceeds

 

The Placing has raised gross proceeds of £11 million. The Directors intend that the net proceeds of the placing will be used:

o    as to approximately £3 million for Central services infrastructure;

o    as to approximately £2 million for new base costs;

o    as to approximately £3 million Tanzania working capital; and

o    as to the balance for general working capital.

 

Intended Open Offer

 

·         In addition to the Placing, it is intended that a total of up to 250,000,000 new Ordinary Shares at the same price of 1.6 pence per share as the Placing shares will be made available to qualifying Shareholders pursuant to an Open Offer to raise up to £4 million before expenses.

 

·         Not all Shareholders would be qualifying Shareholders. In particular, Shareholders who are located in, or are citizens of, or have a registered office in restricted jurisdictions and certain other overseas jurisdictions would not qualify to participate in the Open Offer. Details of the definitive terms of the Open Offer, including the offer timetable and record date, will be set out in the Circular when it is published.

TAAG Angola puts inflight Wi-Fi and mobile phone services

TAAG Angola Airlines has become OnAir’s first Sub-Saharan African customer – line fitting its new B777-300ER fleet with Internet OnAir and Mobile OnAir. The airline will use Thales’ TopConnect to access OnAir’s inflight Wi-Fi and mobile phone services on its new fleet, to be delivered from May 2014. OnAir offers a consistent, reliable service across Africa and all the routes the airline flies, thanks to the widest-reaching network of regulatory approvals and the largest and most geographically diverse number of roaming agreements of any provider. With authorizations from over 100 countries and more than 375 roaming agreements, OnAir provides consistent coverage on all the major routes across the world. In addition, OnAir uses Inmarsat’s SwiftBroadBand satellite network, the only network to provide worldwide coverage.

 

“TAAG is an ambitious airline, leading the modernization of air transport in Angola,” said Captain Lourenço Manuel Gomes Neto, Executive Vice President Operations of TAAG Angola Airlines. “OnAir connectivity, in the form of inflight Wi-Fi and GSM, gives our passengers the freedom to stay in touch with the world outside the aircraft, strongly enhancing their experience. The worldwide service reliability is particularly important, given the routes we fly across from and across Africa.” Passengers flying on TAAG Angola’s B777-300ER will experience the full benefits of OnAir connectivity. The inflight Wi-Fi solution, Internet OnAir, enables passengers to email, update their social media, and browse news sites. Like a Wi-Fi hotspot on the ground, passengers only need to log on and their enter credit card details before they are free to surf the Internet.

 

Passengers can also use OnAir’s inflight GSM product, Mobile OnAir, to email, text, talk, and use their mobile apps as they please. Charges are included in the user’s monthly phone bill, exactly like using international roaming. “This new deal with TAAG Angola Airlines shows that cabin connectivity is now a truly global market,” said Ian Dawkins, CEO of OnAir. “We are in the strongest position to make inflight connectivity a truly worldwide phenomenon, given the breadth and depth of our regulatory and roaming agreement networks. On top of SwiftBroadband’s consistency across the world, this means we can offer an un-compromised service to all airlines, wherever they might be.”

 

Source: OnAir

VIDEO: Kenya Airways First Boeing 787 Dreamliner Arrives in Nairobi 05APR14

VIDEO: Kenya Airways First Boeing 787 Dreamliner Maiden Flight From Seattle

fastjet signs agreement with Proflight Zambia

fastjet, Africa's low cost airline, is pleased to announce that it has signed an agreement with Lusaka-based regional airline Proflight Zambia, enabling passengers of both airlines to travel easily between 15 destinations across Zambia, Malawi and Tanzania served by the two carriers. This alliance not only will see both airlines expand in reach but also establish Lusaka as a regional aviation hub. fastjet will solely service the route between Dar es Salaam and Lusaka from 1 May 2014, as well as Tanzanian domestic routes from Dar es Salaam, while Proflight will service its existing domestic routes in Zambia, and its route to Lilongwe in Malawi, from Lusaka.

 

fastjet passengers are now able to book Proflight flights in conjunction with a fastjet ticket online at www.fastjet.com, or at any of the airline's sales offices. Fares combining Proflight and fastjet flights will include a free checked-in baggage allowance of 23 kgs. "fastjet has cemented its reputation as a reliable, affordable low-cost carrier, maintaining excellent punctuality and reliability records," says Richard Bodin, Chief Commercial Officer of fastjet. "This collaboration with Proflight Zambia adds momentum to fastjet's vision of democratising air travel on the African continent, while boosting growing trade relationships between Zambia and Tanzania."An efficient aviation sector that offers passengers affordable, safe and reliable flights to the destinations of their choice is sure to boost tourism and commerce in both countries," he adds.

 

"The agreement signed with fastjet is the latest step in our strategy to develop a network in the region, making air travel in Southern Africa more convenient and accessible," said Captain Philip Lemba, Director of Government and Industry Affairs at Proflight. "We look forward to being able to combine the service and value for money that the joint initiative brings." The agreement sees passengers able to book flights on a single ticket from any of Proflight's destinations -Livingstone, Ndola, Mfuwe, Chipata, Solwezi, Lower Zambezi, Mongu, Kasama and Mansa, and Lilongwe in Malawi, all via Lusaka - to Dar es Salaam, or via that city to Kilimanjaro, Mbeya and Mwanza in Tanzania, on fastjet.