Fastjet: An Airline in a Hurry
Styling itself as “Africa’s first pan-African low-cost carrier,” Fastjet certainly looks like an airline in a hurry. Having opened its base in Dar es Salaam, Tanzania, only late last November, it now plans to launch operations in Kenya, Angola and Ghana this year, starting with five Airbus A319s it aims to acquire during the first six months of its expansion and 15 within a year. It also hopes to benefit from the wreckage of South Africa’s low-cost sector with its pending acquisition of defunct 1Time Airline.
Owned by a group led by London-based Lonrho, Fastjet traces its heritage to Kenya’s Fly540, an airline in which the British investment company–then known as Lonrho Africa–took a 49-percent interest in October 2006 and expanded the business with operations in Ghana and Angola in 2011. Last June, the UK’s Rubicon Diversified Investments completed a reverse takeover of the aviation division of today’s Lonrho for $85.7 million, leaving Lonrho with 73.7 percent of the enlarged company’s shares. Sir Stelios Haji-Ioannou’s easyGroup took 5 percent of the company as a consideration for his consultancy. Fastjet, the new brand to be built on the Fly540 platform, leased its first A319 in October from BBAM, the world’s third-largest commercial aircraft lessor.
Fastjet carried almost 7,000 passengers at an average load factor of 85.4 percent during its first week of operation. It sold more than 18,000 tickets from Dar es Salaam to two destinations–Mwanza and Kilimanjaro–and said it had booked flights through March. It said it plans to open its other bases “in the coming months.” Once established in East Africa, FastJet plans to open bases in Accra, Ghana, and Luanda, Angola.
Fastjet CEO Ed Winter, the former British Airways chief pilot who oversaw the integration of BA LCC Go into easyJet to eventually become the low-fare carrier’s COO, rejects skepticism borne of the fact that the new airline inherited debts of $45 million. “What we saw when we looked at the numbers is that [African] GDP is starting to grow all over the place,” he said. “There’s a growing middle class.”
Only weeks after declaring an interest in 1Time, it entered into an option agreement, subject to shareholder approval, to take over the bankrupt low-fare carrier for 1 South African rand ($0.12). Winter said he hoped to get the airline flying once again “early in the new year” using up to three of an existing fleet of 12 MD-82s, MD-83s and MD-87s on new operating lease agreements. Restructuring plans would see a “rapid” re-fleeting with Airbus A319s. Initial flights would serve the domestic routes of Johannesburg, Cape Town, Durban, Port Elizabeth and East London. Winter vowed that Fastjet’s entry into South Africa would counteract the “huge increases in fares by competitors” that followed 1Time’s demise.