Fasjet losses deepen to $15 million
Fastjet losses deepen to $15 million in 1H
Fastjet A319
“The first six months of 2016 was a very difficult and challenging time for Fastjet,” new CEO Nico Bezuidenhout said.
“While positive developments included the launch of Fastjet flights between Harare and Johannesburg, adverse economic and trading conditions significantly impacted the company’s financial results and passenger numbers.”
Passenger numbers for the first half rose 9.6%, to just under 399,000. However, capacity—as measured as ASKs—increased 58%, which resulted in load factor plummeting from 70% a year previously to 48% this time. RASK dropped to 5.06 cents compared to 7.61 cents in the year-ago half.
Bezuidenhout, who took on the role Aug. 1, is in the middle of a fundamental review of the carrier’s business model and operations. “My immediate priority is to stabilize the business, reduce costs and ensure that we have the correct size of fleet, in terms of both number and size of aircraft,” he said.
Early tangible results included a decision, as anticipated, to relocate the airline’s HQ from London Gatwick Airport to Johannesburg, which is Tanzania-based Fastjet’s largest international destination. The switch is expected to be completed by early 2017.
The CEO also confirmed plans to swap out the airline’s fleet of Airbus A319s for smaller aircraft. The half-yearly report said Fastjet was still evaluating both Embraer and Bombardier models in the 80-120 seat category, although CCO Richard Bodin recently told ATW the Embraer E190 was the likely choice.
The transition from the existing A319 aircraft to the replacement fleet will be arranged initially through short-term ACMI leases. The first aircraft under such an agreement will be in service by the end of September, with the intention to replace the wet-lease arrangement by a dry-lease in the first half of 2017.
“By the end of the year, our existing fleet of five A319 aircraft will be reduced to three and will be replaced by three smaller leased aircraft, an initiative which is expected to lead to a reduction in seat capacity and trip-cost of approximately 15%,” Bezuidenhout said.
One A319 has already left the fleet and a further two leased of the type are scheduled to exit at the end of their leases at end September.
The Group’s sole-owned A319 has been put up for sale and the remaining two leased aircraft will be based in Tanzania while the company pursues sub-lease opportunities.
“Conditions remain very challenging and there is much work to be done,” Bezuidenhout said. “But I am confident that the business is becoming more stable and that we are slowly moving towards a platform from which, in due course, Fastjet will be able to consider gradual expansion opportunities and start to deliver on its undoubted potential,” he said.
On Sept. 19, Fastjet introduced distribution through Amadeus, an important move as an estimated 80% of African air journeys continue to be sold through travel agents.
This article was earlier published here
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