FASTJET PLC has taken the
decision to cease funding
Fastjet Airlines Limited,
its subsidiary in Tanzania,
a move that could see
the airline’s operations in
Tanzania cease.
When reporting its interim
results for the six months
ending June 2018, fastjet
said: “Recent changes in
the competitive landscape
in Tanzania have caused the
Board to evaluate fastjet’s
Tanzanian operations and
the consequential financial
impact of continued losses
in this operation, which
could include ceasing
operations in the country.”
In the statement, fastjet
PLC also warned that it
needed additional funding
by the end of October
to enable it to continue
operating.
However, fastjet ceo,
Nico Bezuidenhout, quickly
reassured the market
that he was confident
funds would be raised.
“Having ring-fenced the
funding obligation as far
as Tanzania is concerned,
the fastjet business is
potentially in a better
position than it has ever
been before.” He added
that the company had two
very strong growth markets
in its Zimbabwe and
Mozambique subsidiaries.
In an interview shortly
after the results were
released, Nico was less
confident with the outlook
in Tanzania. Asked if
the company could pull
out of Tanzania, he said
it was up to the local
board and local entity
to evaluate alternative
sources of funding. “From
our perspective, there are
alternative growth markets
available on the continent
and, in the short term, we
see a better use of funding.
“Ultimately it would be a
pity to pull the brand out
of the market, given the
fact that it is the biggest
aviation brand in Tanzania.”
He said historically, under
a better competitive
environment, the business
had generated substantial
monthly revenue.
While not naming Air
Tanzania outright, he made
reference to the airline’s
placement of a Boeing
787 on a one-hour flight
sector, adding 280 seats.
“We have seen that fares
over the last two months
have come down quite
drastically.
