FastJet expands as shares plunge and boss quits

A succession of upheavals has presently left the way ahead for African airline FastJet somewhat up in the air. The airline holds ambitious plans to become the first low-cost pan-African airline and is backed by easyJet founder Stelios Haji-Ioannou, who co-founded the airline with a 10% stake.

Operating in a very financially competitive and politically and economically comparatively volatile environment, it is pushing through aggressive expansion against a backdrop of key personnel changes.

Despite warning in December that sales would be lower than forecasts in both 2015 and again this year due to tough conditions in the markets in which it operates plus unfavourable currency movements, the airline has announced this week that it has secured approval for new flights between Johannesburg and Harare, commencing on February 1.

With around 100 buses plying the 24-hour journey daily, Fastjet is confident that there is significant demand for affordable air travel between the two cities. Fastjet has also secured approval for a weekly flight from Victoria Falls to Johannesburg, and in December added new routes to and from Kenya.

However, also this week FastJet announced that it has stopped its flights to Malawi, due to the continuing plunging of the value of the Malawian currency, the kwacha.

It has also been dealing with uncertainty in Tanzania following sharp depreciations of the Tanzanian shilling and where demand for flights dropped around the time of the Tanzanian presidential election in October as fewer government officials and civil servants flew around that time.

The UK-listed airline, which launched in 2012 to copy the success of low cost European operators such as easyJet and Ryanair, and offering extremely low fares while charging for all luggage, food and drink on its ‘planes, has seen its shares more than halve in the last year.

The last couple of weeks has also seen the troubled airline’s chief executive, Ed Winter, 69, step down following four years at the controls of the loss-making carrier. However, he will remain in his post until a replacement is found and will continue to advise the company as a consultant. And just this week the company has appointed a new chief financial officer and executive director, Lisa Mitchell, replacing Nick Caine, with immediate effect.

Furthermore, last month FastJet also announced the departure of three non-executives from its board, while its chairman, Colin Child, has only been in the role for less than four months.