Fly540

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Fly540
Fly540 logo.png
IATA
5H
ICAO
FFV
Callsign
SWIFT TANGO
Founded 2006
Hubs Jomo Kenyatta International Airport
Fleet size 11+9 orders[1]
Destinations 16
Company slogan Your Local Airline
Headquarters Nairobi, Kenya
Key people Don Smith (CEO)
Neil Steffen (COO)
Website fly540.com

Five Forty Aviation Ltd, trading as Fly540, is a low-cost airline which commenced operations in 2006 and is based in Nairobi, Kenya,[2] Accra, Ghana[3] and Luanda, Angola[3] that operates domestic and international passenger and freight services.[4] The airline has two subsidiary airlines Fly540 Ghana and Fly540 Angola both of which operate low-cost services in their respective countries. All of these companies are majority stake-holder owned by the London based African investment group Lonrho Ltd.

History[edit]

Initial domestic services[edit]

Fly540 started operations between Nairobi and Mombasa on November 24, 2006. The service initially operated twice daily using 48-seat ATR 42 aircraft.[5] The airline's name refers to its price of Sh5,540 per adult return fare between the above-mentioned cities.[6]

Lonrho Africa was a major investor in the company, paying US $1.5 million for a 49% stake.[citation needed]

In May 2007 the airline introduced two de Havilland Canada Dash 8-100 aircraft to increase the airline's capacity, allowing it to develop new domestic routes. Passenger numbers rose by 93% to 171,160 in the year ended 30 September 2008, from 88,571 in 2007. At the same time, the load factor amounted to 63%, down from 65.8% in 2007.[7]

Pan-African ambitions[edit]

The original scheduled flights included freight and passenger services between Nairobi and Mombasa, while Kisumu became a destination in January 2007.[6] Daily flights on the Nairobi-Malindi-Lamu route were added to its domestic services in February 2007.[8]

International operations commenced in October 2007 with flights to Juba in South Sudan and Goma in the Democratic Republic of the Congo;[9] Entebbe in Uganda was added in February 2008. It was planned to expand the Nairobi hub's destinations to Rwanda, Mozambique and Burundi in 2009.[10] The company's ambition was to become a pan-African carrier, through an expansion to an additional two regional hubs:

"...we will open up Kigali and then head to West Africa. Ghana will be the hub for West African region. In Southern Africa, we shall use Angola as our hub, so it will become a pan African low cost airline".[11]

Fly540 received authorisation to start operations in Angola in April 2009. The initial plans include domestic flights to Cabinda, Luanda, Soyo, Benguela, Huambo and Malanje,[12] but an expansion within the region will take place as soon as the domestic market has proven its success.[10] In June 2009, it was reported that Fly540 was working to set up a regional franchise in Zimbabwe.[13]

Fly540 Tanzania launched direct flights[14] between Dar es Salaam and Mwanza, on the western shores of Lake Victoria. Initially the company operated 11 flights a week and it was hoped that in time its Fokker 28 aircraft, which carrie 28 people, would be upgraded to a 50-seater CRJ 100.

Investment by Fastjet[edit]

In June 2012 Fly540 was sold for $85.7 million (Sh7.3 billion) to British investment firm Rubicon Diversified Investments (now Fastjet Plc [15]), who purchased the airline from Lonrho group. Rubican said it had chosen to acquire Fly540 as its platform for the launch of a budget airline in Africa, to be modelled on Europe's second largest low cost carrier EasyJet.[16]

The first flights were transferred to the new airline, Fastjet, from 29 November 2012.[17] These were two domestic routes in Tanzania; it had been expected that all Fly540 flights would quickly be transferred to Fastjet, in turn, as the various arrangements and permissions required for each route are agreed.

Following the acquisition of Lonrho's 49% interest in Five Forty Aviation Ltd, and a further 49.98% economic interest in the company approved at a Fastjet General meeting on 29 June 2012 and completed on 2 July 2012, it became apparent that the vendor did not consider the additional acquisition had completed. The dispute led to legal claims by both parties over the ownership and other matters.[18] A Memorandum of Understanding was reached on 23 April 2013 where both parties agreed to stop legal proceedings against each other, but because Fastjet now considered they did not have control or significant influence, Five Forty Aviation Ltd has since been treated as an investment in their accounts. The Fly540 operations in Tanzania, Angola and Ghana, however, are fully incorporated within Fastjet's accounts.

Corporate affairs[edit]

Ownership and associated companies[edit]

Since the acquisition of Lonrho (BVI) Ltd's interest on 29 June 2012, Fastjet has owned 49% of Five Forty Aviation Ltd.[citation needed]

Business trends[edit]

The key trends for Fly540 over recent years are shown below. The main sources of published information are the Annual Accounts of Lonrho Plc, where Fly540 formed its Transportation business segment (because although Lonrho owned less than half of the voting power of Five Forty Aviation Ltd, it was able to govern the financial and operating policies of the company by virtue of an agreement with the other investors, and therefore consolidated its interest in the company).[19] Figures below are as at year ending 30 September until 2010, then 15 months' financials as at 31 December 2011, but only 12 months' passenger statistics:

2008 2009 2010 2011
Period ending Sept Sept Sept Dec
Turnover (£m) 9.3 21.4 21.1 35.5*
Profits (£m) −4.5 −5.1 −6.9 −11.7*
Number of employees (average) 217 300 405 521*
Number of passengers (m) 0.17 0.22 n/a 0.45
Passenger load factor (%) 63 n/a n/a n/a
Number of aircraft (at year end)
Notes/sources [20][21] [20] [22] ( *15
months)

[19][23]

Destinations[edit]

As of August 2013, Fly540 has the following destinations:[24]

 Kenya
 South Sudan
 Tanzania

Flights from both Ghana and Angola were discontinued in May 2014, with their aircraft returned to lessors. The below routes were previously operated by Fly540

Fly540 Ghana had the following destinations:
 Ghana
Fly540 Angola had the following destinations:
 Angola

Fleet[edit]

As of April 2014, the Fly540 fleet consists of the following aircraft:[25]

Fly540 Fleet
Aircraft Total Orders Passengers Notes
C Y Total
ATR 72 3 0 12 54 66
Bombardier CRJ-100ER 3 0 0 50 50
de Havilland Canada DHC-8-100 2 0 0 37 37
Douglas DC-9-10 2 0 8 72 80
Total 11 0

In January 2008, the company signed a US$150 million contract for eight ATR 72-500s to be delivered in 2008 and 2009.[26] These orders have since been cancelled.[citation needed] In April 2014, Fastjet announced that two ATRs and both DC-9 aircraft were to be withdrawn from service: the ATRs are to be sold, and the DC-9s are to be returned to their lessors. Eventually, all aircraft will be replaced by Airbus A319s as a result of an acquisition of Fly540 by Fastjet.[citation needed]

Accidents and incidents[edit]

  • On 13 August 2008, a Fokker F27-500 cargo aircraft crashed about 20 km (12 mi) from the Namber Konton airport near Mogadishu, Somalia. All three crew members died. The aircraft was said to be carrying a shipment of khat.[27] The aircraft had departed from Wilson Airport in Nairobi.[28]
  • On January 27, 2011, a Fokker 27 plane on test flight departing Wilson Airport failed to take off and ran through the perimeter fence into a maize field. The plane had four persons on board, and no injuries resulted [29][30]

References[edit]

  1. ^ "2011 World Airliner Census", Flight International retrieved 2 May 2012
  2. ^ "Kenya Contact Information." (direct file link) Fly540. Retrieved on 14 January 2011. "Riverside Green Suites Five Forty Africa Head Office Palm Suite, Riverside Drive P.O. Box 10293-00100 Nairobi, Kenya."
  3. ^ a b Office Locations, http://www.fly540africa.com/where_to_find_us.aspx
  4. ^ "Directory: World Airlines". Flight International. 2007-04-03. p. 83. 
  5. ^ Airliner World January 2007
  6. ^ a b The Standard, January 18, 2007: The new kite in the skies
  7. ^ Lonrho PLC, March 30, 2009: Annual Report 2008
  8. ^ Fly540 news
  9. ^ The Standard, September 26, 2007: Fly540 eyes Sudan and DRC
  10. ^ a b Lonrho PLC, November 11, 2008: Lonrho Raises £15.6 million to Continue the Development of its Core Businesses
  11. ^ The Monitor, August 12, 2008: Africa: Fly540 Airline Sets Eyes on Continent
  12. ^ Lonrho PLC, April 29, 2009: Air Services Licence Issued for Fly540 Angola
  13. ^ Zimbabwe Independent, June 4, 2009: Zimbabwe: LonZim Planning to Set Up Airline
  14. ^ http://www.wantedworldwide.net/news/7176/new_flights_from_dar_es_salaam_to_mwanza.html
  15. ^ 4-traders.com, August 7, 2012: Rubicon Diversified Investments PLC : Result of EGM & Change of Name to FastJet
  16. ^ The Star, Nairobi, July 9, 2012: Kenya: Fastjet to Phase Out Fly540 By October
  17. ^ Centre for Aviation, November 30, 2012: FastJet takes to the air, promising a modern pan-African network
  18. ^ "Annual Report 2012". Fastjet Plc. Retrieved 29 August 2013. 
  19. ^ a b "Annual Report and Accounts 2011". Lonrho. Retrieved 7 January 2013. 
  20. ^ a b "Annual Report and Accounts 2009". Lonrho. Retrieved 6 January 2013. 
  21. ^ "Directory". SoftKenya.com. Retrieved 7 January 2013. 
  22. ^ "Annual Report and Accounts 2010". Lonrho. Retrieved 7 January 2013. 
  23. ^ "FastJet Passenger Statistics for December 2012 - includes statistics for Fly540 Kenya, Fly 540 Ghana and Fly540 Angola.". EasyGroup. Retrieved 10 January 2013. 
  24. ^ Fly540 website
  25. ^ http://www.planespotters.net/Airline/Fly540
  26. ^ EADS, January 11, 2008: Lonrho to acquire eight ATR 72-500s for airline Fly540
  27. ^ www.bloomberg.com - Kenyan Cargo Plane Crashes Near Somali Capital; Three Killed
  28. ^ Daily Nation, August 13, 2008: Plane crashes in Mogadishu
  29. ^ Daily Nation, January 27, 2011: Fly 540 plane crash-lands in maize field
  30. ^ Aviation-safety.net: ASN Wikibase Occurrence # 89608

External links[edit]