LOW-COST carrier fastjet’s
brand licensing agreement
with Federal Airlines has
given it a foothold in South
Africa, giving it access to a
local network and the ability
to launch domestic flights
in South Africa, with the
possibility of further enhancing
its regional network too. It is
a development expected to
disrupt the aviation landscape
in South Africa.
The agreement includes an
option to purchase, which
fastjet has not exercised.
Nico Bezuidenhout, ceo,
says the agreement brings
opportunities to both parties:
Federal Airlines has an
existing network and an
established presence in SA,
while fastjet has a presence
in multiple geographical
locations, distribution and
an interline agreement with
Emirates.
Nico did not go into details
about any future flights, but
comments: “Federal Airlines
will be looking to expand
into additional routes in
South Africa and regionally,
using the fastjet brand.”
He adds that new routes
will be accessed on a caseby-case
basis, taking into
account the, financial viability,
competition landscape as well
as passenger volumes on the
route.
The deal will disrupt the
aviation landscape in
South Africa. Barsa ceo,
June Crawford, says the
development gives fastjet,
through Federal Airlines, the
ability to operate domestic
flights. She points out that
foreign companies need to
prove a 75% South African
shareholding to operate
domestic flights in SA, which
fastjet does not have. June
says this agreement is a
creative way for fastjet to
enter the domestic aviation
market in SA.
Referring to the brand
licensing agreement with
Federal Airlines in SA
and Solenta Aviation in
Mozambique, Nico says
initially fastjet will launch
domestic flights, but that
as Mozambique shares
borders with all the countries
in which fastjet operates
(SA, Zimbabwe, Zambia and
Tanzania), it does make sense
in time to link these countries
to each other.
Nico says Federal Airlines
flights, which service safari
lodges in South Africa, will
continue to operate under the
existing brand. Rebranding
these flights as fastjet flights
is an option but will depend
on engagement with the
trade. He adds that fastjet
will seek to leverage its
distribution channels to make
Federal Airlines’ seats more
accessible and that making
these seats available on
the GDS is a possibility.
Under Nico’s leadership, the
airline has moved its head
office from London to South
Africa, re-fleeted with Embraer
145s and eJets, while a new
management team in SA is
also in place with an average
of between 10 and 15 years
global and African aviation
experience per person. In
the first half of the airline’s
financial year, which runs from
January to December, absolute
costs were reduced by 46%,
losses were reduced by 57%
and unit revenue was up 30%.
“Our objective is to reach a
cashflow break even in quarter
four of this year and we are
currently on track to achieve
that,” says Nico.
