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.”

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.

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.

fastjet Passenger Statistics for February 2014 and extension of EFF

 

12 March 2014 - fastjet plc is pleased to announce its passenger statistics for the month of February 2014 and an extension of its existing EFF from £15 million to £25 million.

 

fastjet Tanzania:

 

fastjet operations in Tanzania carried a total of 35,100  passengers and achieved a load factor of 76 per cent.  The average yield per passenger was $82, compared to $47 in February 2013.  Total revenue for the month was $2.87m, a 135 per cent increase from February 2013.

 

Punctuality remained outstanding with 93 per cent of fastjet flights operating on time. ^{Note 5}

 

Fly 540:

 

As expected, the passenger numbers carried by the legacy 540 businesses, particularly in Angola, continued to fall year-on-year as those businesses undergo significant restructuring.

 

Extension of EFF

The Company also announces that it has agreed to extend its current Equity Finance Facility ('EFF') with Darwin Strategic Ltd. from £15 million to £25 million.  All other aspects of the initial EFF agreement announced on 14^th June 2013 remain unchanged.  fastjet is also in talks with a number of potential long term investors. Whilst these are concluded the agreement with Darwin to extend the EFF is a prudent measure, which provides the Company with the flexibility to raise finance in the short term as required.

 

Ed Winter, interim Chairman and Chief Executive Officer of fastjet, said: 

 

"Our February performance continues to demonstrate how well the low cost model is working, producing strong average yields whilst still providing plenty of low-fare seats for passengers booking their seats early.  The continued growth in passenger numbers and yields puts fastjet well on track to become cash generative as the route network and capacity increase."

 

 

All Operations Note 1
Month ending	Feb 2014	Feb 2013	Change
Passengers Note 2	79,715	77,829	2.4%
Rolling 12 months ending	Feb 2014	Feb 2013	Change
Passengers Note 2	985,565	758,970	29.9%
fastjet Operations Note 4
Month ending	Feb 2014	Feb 2013	Change
Passengers Note 2	35,100	25,987	35.1%
Load Factor Note 3	76%	80%	-4pp
Rolling 12 months ending	Feb 2014	Feb 2013	Change
Passengers Note 2	379,901	83,330	356%

 

Notes:

1.  "All Operations" includes statistics for fastjet Tanzania, Fly540 Kenya, Fly 540 Ghana and Fly540 Angola.
2. "Passengers" for 540 operations are flown passengers and for fastjet operations are sold seats flown, in both cases excluding infants.  Fastjet bookings are generally non-refundable whereas 540 bookings are in some circumstances refundable 
3. "Load Factor" is the number of 'passengers" as a percentage of the number of available seats flown.  
4.  "fastjet Operations" includes only statistics for Fastjet Tanzania operations which commenced on 29^th November 2012
5. "on time" - arrival earlier than or within 15 minutes of schedule.

Kenya's Fly-SAX Seeks Tanzania Flights

 

The battle over Africa's skies ramped up a notch Tuesday as Kenyan low-cost carrier Fly-SAX said it was awaiting regulatory approval to launch a new airline based in Tanzania, a move that would put the airline head-to-head with fastjet PLC. Closely held Fly-SAX expects its SAX-Tanzania to make its maiden flight in the second half of the year with a fleet of small planes seating 12 to 80 passengers and serving some of the more remote parts of the country, according to a person familiar with the company's plans. In time, Fly-SAX hopes to get government approval for SAX-Tanzania to fly internationally from Tanzania, in a bid to attract a bigger and more lucrative market, this person said.

 

"We are launching a new airline to meet the ever-increasing demand for low-cost, efficient and safe air travel within Tanzania from the country's own citizens as well as international tourists," said Don Smith, chief executive of Fly-SAX and Fly 540 Kenya, in a news release prepared for distribution Wednesday. Fly-SAX has appointed Brown Francis as general manager of SAX-Tanzania. Mr. Francis joins from fastjet, where he was director for industry affairs for Tanzania. U.K.-based rival fastjet operates nationally and internationally from Tanzania, where it has effectively become the national flag carrier and has the right to fly to South Africa and Zambia.

 

The opportunity in Africa for airlines in general, and in particular for a budget carrier, is enormous because of the robust growth of regional economies and the continued development of internationally trading industries. These drivers have already triggered a significant rise in air travel. According to the latest data from trade body International Air Transport Association, air traffic measured by revenue passenger kilometers grew 5.1% from January to November 2013, compared with the same period in 2012. In Tanzania alone, capacity per week has grown to 54,000 available seats per kilometer from just 37,000 five years ago, according to aviation-consulting firm Innovata.

 

Source: wsj

Fastjet starts roll-out of Ancillary Products

 

Fastjet, Africa's low cost airline, has signed two agreements with partners in the travel industry, marking the launch of 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).

Head of commercial Ellis Cain-Jones said: "Ancillary revenues are a key element of the low cost model and contribute to the airline's revenues. These joint-ventures, together with our rapidly developing on-board retail offering, are the first of a very exciting list of customer-centric products fastjet expects to roll-out over the coming months.

"fastjet will also continue to work in each of the local markets in which it operates to identify uniquely local ancillary products that help promote local commerce and increase customer satisfaction."

 

Source: stockmarketwire
 

Fastjet Zambia planning to serve Johannesburg Once Operational

 

Fastjet Zambia will operate from Lusaka to Johannesburg O.R. Tambo once the airline is launched Fastjet Chief Commercial Officer, Richard Bodin, has revealed. In an interview with iafrica.com, Mr Bodin said plans for their new Zambian subsidiary were progressing well. "We are still very keen to establish an operation in Johannesburg O.R. Tambo," he added. "What we are currently working towards is to link our destinations with Johannesburg. Once we have established our base in Zambia, which we expect could be within the next three to six months, the very first route launched will be Johannesburg."

As previously reported, Fastjet Zambia is currently in the process of acquiring its Air Operators Certificate. "Zambia was chosen because obviously the market there offers great opportunities but also because the authorities there were very welcoming and keen. It is inevitable that countries with the most forward-thinking mentality are going to be the ones that attract us. And South Africa is certainly going to be a cornerstone," he added.

Bodin added that Fastjet was currently in talks with several countries over the possibility of their establishing a Fastjet franchise.

 

Source: ch-aviation

Fastjet still has eyes on South African Market

 

A domestic operation in South Africa is still on the cards for Tanzanian-based low-cost airline, Fastjet, with several more regional hubs being considered to grow intra-African routes. Capacity on the airline’s new Dar es Salaam – Lusaka service, launched last month, has been doubled with Chief Commercial Officer, Richard Bodin, commenting that plans to establish an independent base in Zambia have progressed well. "We are still very keen to establish an operation in Johannesburg," he added. "What we are currently working towards is to link our destinations with Johannesburg. Once we have established our base in Zambia, which we expect could be within the next three to six months, the very first route launched will be Johannesburg."

 

The long-term plan is to see different Fastjet-branded companies established across Africa. Ownership could be almost entirely locally-owned but "it is part of our quest to democratise air travel in Africa," Mr. Bodin maintained. He said the airline had no plans to syndicate its brand beyond the continent. And while new routes and hubs will be established in places of least resistance, a South African operation remains a priority. "We are in discussions with a few governments and companies which have seen the impact that affordable airfares have had.

 

"Zambia was chosen because obviously the market there offers great opportunities but also because the authorities there were very welcoming and keen. It is inevitable that countries with the most forward-thinking mentality are going to be the ones that attract us. And South Africa is certainly going to be a cornerstone," he added.

 

Source: iafrica

Fastjet recruits industry executive to spearhead expansion in East Africa

 

Fastjet has recruited an experienced airline executive to spearhead its expansion in East Africa. Jimmy Kibati will become fastjet’s general manager, East Africa, on March 17 this year. He has over two decades’ experience in the commercial airline business, having joined Kenya Airways in 1992, where he progressed through various senior commercial positions, including head of network planning & airline strategy.

 

In January last year, he was appointed acting commercial director of Kenya Airways, where he oversaw the restructuring of the airline’s commercial department and drove the execution of the company’s commercial and planning strategies, including plans for the B787 Dreamliner and B777-300 fleet’s entry into service and new growth plans into Asia and Africa. Ed Winter, interim chairman and CEO, said: "I am absolutely delighted that we have recruited such a high calibre airline executive to spearhead fastjet’s expansion in East Africa. Jimmy’s vast experience in the East African aviation market will be invaluable as we fulfil our goal of becoming a truly pan-African low cost airline.

 

“Jimmy’s appointment underlines the confidence which fastjet’s track record has generated within the industry.”

 

Source: aviator.aero

VIDEO: Fastjet now ready to Capitalise and Expand the Company

Fastjet to Increase Lusaka Zambia Flights

 

African low-cost airline fastjet PLC Tuesday said it will increase capacity on its new route between Dar es Salaam in Tanzania and Lusaka in Zambia after it met strong customer demand, and it predicted it would be providing a daily service on the route in the future.

 

The airline only launched the route, its second outside Tanzania, on February 3, although it had said at that time that it hoped to be able to increase capacity on the route in the future. It started with a twice-a-week service and will now add a third rotation service each Tuesday. In a statement, it said it has been experiencing high load factors on the route and several flights have been completely sold out.

 

"Our research suggested that this was going to be a successful route with high demand but initial passenger numbers and interest have exceeded expectations. We expect to add still more capacity on this route - our target is to operate daily," Chief Commercial Officer Richard Bodin said.

 

Fastjet added that its plans to establish a base in Zambia are progressing. It is incorporating a company in the country and has started the process of getting an air operating certificate in Lusaka.

The airline currently operates several routes within Tanzania under the fastjet brand. Its first "international" route was between Dar es Salaam and Johannesburg, while it added the Lusaka route this month. Fastjet shares were up 5.1% at 2.05 pence Tuesday morning.

 

Source: LSE

Regulations stifle airline growth, says fastjet CEO

 

 

FASTJET CEO Ed Winters has called on the government to do more to create a level playing field for airlines to operate in South Africa. He said Africa should be looking at ways to deregulate the market, as happened in Europe, as the current regulatory impediments and bureaucracy were hampering the growth of the industry.

 

"In the ’80s and ’90s Europe used to have loads of loss-making state airlines, guzzling money from the taxpayer and distorting the marketplace. Now they have a thriving, healthy and competitive aviation industry." The company has said that regional routes from South Africa to sub-Saharan destinations lack effective competition and are underserviced and overpriced. "The level of protectionism that we see is incredible, not just in South Africa, but throughout sub-Saharan Africa. Almost every country is protectionist and so keen to continue subsiding their loss-making state airlines."

 

Mr Winters said South African Airways (SAA) was overstaffed compared to international benchmarks. "Not by small numbers but by a factor of four or five. It is a huge employer."Speaking at SAA’s recent results presentation Public Enterprises Minister Malusi Gigaba said that the airline would not consider retrenching staff as part of the long-term plan to return the ailing state airline back to profitability. SAA employs 11,500 staff.

 

Mr Winters said fastjet remained interested in setting up a South African operation. "We want to form a company in South Africa to operate out of Johannesburg." This would be done in compliance with all local regulations, especially the local ownership rules which require a domestic airline to be 75% owned by local individuals or entities before it can operate scheduled domestic flights. He said the company was watching with interest the court case between Comair and Safair over the local ownership rules and whether this would set new precedents around regulation.

 

In terms of the low-cost airline’s new route from Dar es Salaam to Lusaka, launched at the beginning of the month, Mr Winters said it was already performing above expectations. The route was proving to be extremely popular, especially for traders, as it cut down a 24-road trip to a two-hour flight. Its Tanzanian operations had one of their best months in December.

 

Source: BDLive

Ethiopian Airlines chief dismisses Stelios’s "Fastjet" African dream

Africa is not ready for airlines such as Fastjet, the brainchild of EasyJet founder Stelios Haji-Ioannou, says the head of the continent’s leading carrier. Ethiopian Airlines chief executive Tewolde Gebremariam told the Aviation Club in London yesterday: “We have a different view of the low-cost model in Africa because cross-border traffic in Africa is fragmented.”

Gebremariam said: “Low-cost carriers are based on utilising aircraft 10 times a day, then unit costs come down. It is very difficult to do that in Africa. “Point to point will be challenging on the continent [because] 60% of market segments in Africa have less than 50 passengers per day.” Fastjet began operating as a low-cost carrier in November 2012, based in Tanzania and also serving South Africa and Zambia.

Co-founder Haji-Ioannou has plans to turn Fastjet into a pan-African carrier But Gebremariam said: “There are other constraints. One is traffic rights between countries. “The low-cost model could be perfect within a country’s borders, within Nigeria or South Africa for example. But the issue of cross-border traffic rights is a big bottleneck.”

He added: “The low-cost model should transform costs. But in Africa low-cost and full-service carriers pay the same not just for fuel but for [using] the airport. It is very difficult.” Gebremariam was also critical of European governments, especially the UK’s. He said: “We see aviation’s centre of gravity moving from Europe to the Gulf and European governments and politicians are helping the [Gulf carriers] by making it very difficult for airlines to operate in Europe. “Tax is one factor. Airport congestion is another. Ethiopian Airlines wants to fly to Heathrow twice a day but we can’t even go daily. We operate six flights a week. “A third runway has been discussed for years. Dubai just got on and built six runways.”

Source: TravelWeekly

Kenya Airways in talks to acquire bigger stake in Precision Air

 

 

Precision Air (PW, Dar-es-Salaam) is in talks with 41.23% shareholder, Kenya Airways (KQ, Nairobi Jomo Kenyatta), in a bid to raise USD30million in capital needed to keep the struggling Tanzanian airline afloat. According to The East African, the ongoing talks could see Kenya Airways boosting its stake in Precision Air after similar discussions with the Tanzanian government collapsed. “KQ was waiting for the government’s decision. When the government gave us its final decision on the matter, KQ came up with the idea to increase its stake, over which we are still in discussion. Our aim is it get between $20 million and $30 million through equity,” said Precision's chairman, Michael Shirima.

 

Faced with rising uncertainty about its future, caused largely by a failed 2012 IPO and an overambitious expansion plan, Precision Air has been forced to make drastic cuts to its fleet and route network in recent months as it struggles to stay afloat. Increased competition from Fastjet (FN, Dar-es-Salaam) on domestic routes has also compounded its woes.

 

Source: ch-aviation

Fastjet Recruiting Senior Commercial Planning and RM Analyst

 

 

Fastjet.com is Africa’s newest airline; having taken over fly540 operations in four countries across Africa we are consolidating the management functions in Europe and turning fly540 into a pan-African low-cost airline.  Fastjet has introduced modern and reliable western aircraft into African markets and fill the aircraft using aggressive inventory management and low lead-in prices.  The airline is backed by investors with experience in both the airline industry and the African marketplace.

 

Fastjet.com is looking to recruit a Senior Commercial Planning and RM Analyst to work for the fastjet commercial department.  This is a very hands-on role that will quickly expand in responsibilities as the airline grows.  The role will be based in Gatwick with occasional overseas travel and will report to the Head of Revenue Management & Route Development.

Salary: Subject to Candidate
Closing Date:  Feb 9, 2014
Please send covering letter and CV to dustin.holland@fastjet.com
Start Date: Immediate

Responsibilities

 

Revenue Management Duties:
·       Make tactical and strategic inventory movements to maximise revenue
·       Analyse booking data to make inventory and pricing decisions
·       Regularly report performance and ad hoc daily reporting to support inventory movements and organizational needs
·       Produce analysis and reports with actionable recommendations to maximise revenue
·       Collate, research and report data to produce demand and pricing models
·       Review and monitor competitors actions
·       Maintain data, information and inventory set-ups in the reservation system
·       Establish seasonality and inventory profiles and make amendments as required
·       To maintain fare rules both in terms of text and system restrictions
·       Price group and other travel requests
·       Fare collection and maintenance of fare databases
·       Loading and maintaining public and private fares in the reservation system
·       Regular system testing of new features and ticketing restrictions to ensure the smooth running of the reservation system
·       Maintain agent and office access through functional restrictions and office credit limits
·       Investigate system problems and fix ticket issuance issues
·       Void and refund tickets
Qualifications
·       At least 5 years of heavy analytical experience
·       Experience in data management, finance and/or accounting
·       Airline experience
·       Highly numerate
·       Econometrics experience  would be highly valued
·       University education preferred
·       Self-starter with an intellectual curiosity
·       MS Excel experience is a MUST

Source: Fastjet