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Fastjet

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fastjet Plc
Company typePublic limited company
LSE: FJET
IndustryAirline
Headquarters
Johannesburg
,
South Africa
Area served
Zimbabwe, South Africa
Key people
Mark Hurst (CEO)
Kris Jaganah (CFO)
RevenueIncrease US$ 68.5m million (2016)
Increase US$ -63.9m million (2016)
Websitefastjet.com

Fastjet Plc is a British/South African-based holding company for a group of low-cost carriers that operate in Africa. The company's stated aim is to become the continent's first low-cost, pan-African airline, and the operation was initially created with the acquisition of Fly540, an airline operating in East Africa; flights in Fastjet's own name commenced in November 2012 in Tanzania.[1] In order to satisfy local ownership and other requirements, the strategy is to create locally incorporated airlines or a series of licensees to operate services, using a common branding, operational standards and sales platform.

Fastjet Zimbabwe commenced flights in October 2015, and Fastjet Mozambique in November 2017. Plans have also been announced for domestic operations in South Africa.[2]

As of February 2018, the airline operates four Embraer E145 aircraft across East- and southern Africa. It has carried in excess of 2.5 million passengers with an aggregate 90% on-time performance.

Fastjet is also a multi-award-winning airline. In 2017, 2018, and 2019 they were named by the World Travel Awards as Africa's Leading Low-Cost Airline,[3] and Skytrax World Airline Awards named Fastjet the 2017 and 2019 Best African Low-Cost Airline.[4]

History

Fastjet Airbus A319-100

Initial proposals

Originally reported to be competing with easyJet,[5] it was later claimed that Fastjet was planned to be a transatlantic long-haul airline.[6] It was eventually revealed that Fastjet was a proposed low-cost African airline, and that an agreement had been signed with Rubicon Investments.[7]

In June 2012 the plans became clearer. To start the operations, Rubicon Diversified Investments Plc (later renamed Fastjet Plc) completed the acquisition of Lonrho's airline division for a transaction value of US$85.7m, satisfied by the issue of Rubicon ordinary shares to Lonrho. Key shareholders in the enlarged company would be Lonrho and Sir Stelios Haji-Ioannou, through his easyGroup Holdings Limited (“easyGroup”). The airline division acquired included the African regional airline Fly 540, operating in Kenya, Sudan, Tanzania and Uganda, which would form the platform for the development of a low-cost carrier for Africa, branded ‘Fastjet’ under the terms of the easyGroup brand licence agreement.

Commencement of operations

The airline chose Dar es Salaam, Tanzania, as its first operating base in Africa, with flights from Julius Nyerere International Airport commencing on 29 November 2012. Initially flights operated successfully between Dar es Salaam and Kilimanjaro, and between Dar es Salaam and Mwanza. Further routes were to be added quickly, both domestically and to other East African destinations,[8] and FastJet said it would move its operation office from Tanzania to Kenya, once it has approval to operate in Kenya.[9] Once established in East Africa, Fastjet also had plans to launch in Ghana and Angola.[10] In May 2014 Fly540 Ghana and Fly540 Angola were both shut down as they were incompatible with the Fastjet low-cost model.[11][12]

Expansion of services

As well as expanding services from the base in Tanzania, in October 2015 the company obtained an Air Operator's Certificate (AOC) for Zimbabwe,[13] and announced its plans to launch fastjet Zimbabwe. The initial flights between its base at Harare International Airport to Victoria Falls commenced on 28 October 2015,[14] and flights to Johannesburg commenced from 1 February 2016.[15] Although Fastjet Zambia was at an advanced planning stage, in April 2016 it was announced that progress was being deferred until at least the final quarter of 2016.[16]

Restructuring 2016-17

With troubled operations and continued losses, majority shareholder Stelios Haji-Ioannou through his holding in EasyGroup successfully changed the board of fastjet Plc with the departure of six board members in a short period of time. Ed Winters was replaced as CEO by Nico Bezuidenhout, from rival low-cost airline MangoSA, on 1 August 2016.[17]

Bezuidenhout instigated a 'Stabilisation Plan', which included reducing unprofitable routes, switching from A319s to (smaller) Embraer aircraft and moving the airline's headquarters from London Gatwick Airport to Africa - later revealed as a move to Johannesburg.[18] The aim was to achieve cashflow breakeven in the fourth quarter of 2017.[2] As part of a further fundraising in September 2017, to raise not less than US$44m, it was revealed that the Plan's objectives had been achieved or were on track.[2]

Resumption of growth

At the time of the fundraising, it was announced in September 2017 that domestic flights would be launched in both Mozambique and South Africa, by way of brand licence agreements with Solenta Aviation Mozambique and Federal Airlines respectively. Both were established profitable airlines, but only flew small aircraft, operating air shuttle, scheduled and charter services.[2] Fastjet Mozambique commenced operations on 3 November 2017 with flights from Maputo to Beira, Nampula and Tete.

2017 also saw fastjet revise the company slogan from smart travel to for everyone, further reinforcing the company's mandate to make air travel in Africa more affordable and open to all, particularly those who never thought it possible.

2018 and beyond

As of February 2018, CEO Nico Bezuidenhout continues to build on fastjet's current routes, with the launch of a Dar es Salaam to Kigoma flight. The airline launched daily flights between Harare and Bulawayo on 20 July 2018, marking it as the most affordable airline to operate the Harare Bulawayo route. More route launches are expected throughout the course of the year.

As of September 2019, CEO Nico Bezuidenhout has stepped down as the chief executive officer of Fastjet.[19]He has been replaced by Mark Hurst on an intermim basis, while a permanent replacement can be appointed.

Corporate affairs

Ownership

Fastjet Plc (FJET:LSE) is incorporated in England and Wales and is traded on the London Stock Exchange Alternative Investment Market (AIM). The company intends to evaluate a dual listing of the Company on the AltX market of the Johannesburg Stock Exchange.[2]

Current estimated major interests in ordinary shares (as at April 2017)[20] are:

Shareholder Shares Interest
Solenta Aviation Holdings Limited 2,255,504,566 059.34%
M&G Investment Management 745,331,981 019.61%
Janus Henderson Investors 214,943,665 5.66%0
Liberum Capital 212,276,022 5.59%0

Structure

The Group's stated aim is to become the continent's first low-cost, pan-African airline, but each country has different local ownership and other requirements. To accommodate this, Fastjet use a combination of brand licenses and partially owned locally incorporated airlines to operate services, all using common branding, operational standards and sales platform. The current structure is:

Airline Operating Base/Country Operating company Relationship Current status Notes/refs
Fastjet Mozambique Maputo, Mozambique Solenta Aviation Mozambique Ltd. Brand licensee Operational (2017) [2]
FedAir Johannesburg, South Africa Federal Airlines (Pty.) Ltd. Brand Licensee ACMI Operator Operational (2018) [2]
Fastjet Zimbabwe Harare, Zimbabwe Fastjet Zimbabwe Ltd. Brand Licensee Operational (2015) [21]

The subsidiaries are included in the Group financial statements, because although the Group holds 50% or less of the voting rights in each, it controls the management, operations and distributions through contractual agreements as well as its shareholding.[21]

Brand ownership

The Fastjet brand was originally owned by Easygroup Holdings Ltd, and licensed to Fastjet Plc. On 29 June 2017 Fastjet Plc entered into an agreement with Easygroup Holdings Ltd to acquire all intellectual property rights associated with the fastjet brand for $2.5 million.[22] Sir Stelios Haji-Ioannou, who established the fastjet brand in 2012, stated, “fastjet is a great brand in all its African markets, making it a highly valuable asset for the company. I have accepted the view of the current board that the company should own its own brand rather than licence it from me.”

Fastjet Group results are shown below (as at year ending 31 December 2016). Fastjet began trading under its own name on 29 November 2012. Financial results below for 2012 for Fastjet were for the 18-month period ended 31 December 2012. The company and group report in US Dollars.

2011 2012 2013 2014 2015 2016 2017 2018
Turnover (US$ m) n/a 21.1 53.4 53.8 65.1 68.5 46.2 38.5
Profits/losses after tax (US$ m) n/a −55.9 −80.9 −72.1 −21.9 −48.1 - 24.5 - 65.0
Number of employees (average) 8 371 436 271 n/a n/a 211 263
Number of passengers (m) 0.45 0.70 0.99 0.60 0.79 0.79 0.54 0.25
Passenger load factor (%) 62.0* 71.8* 72.0 73.3 66.7 53.7 71 72
Number of aircraft (at year end) 7 n/a 3 6 4 3 3
Notes/sources *Dec only
[23] 		*Dec only
[24] 		[citation needed] [25] [16] [21]

Group Head Office

Fastjet's Group head office is located in South Africa[2]. Prior to 2017,[26] it was based at London Gatwick Airport in Crawley, West Sussex.[27] The move to South Africa was done to lower the cost of doing business.[28]

The registered office and Fastjet plc head office is in London.[29]

Each locally incorporated airline has a registered/head office in its country of operation.[19][failed verification]

Destinations

Fastjet serves 5 destinations in two African countries.

Country Place Airport Notes
South Africa Johannesburg O.R. Tambo International Airport Hub
Nelspruit Kruger Mpumalanga International Airport
Zimbabwe Harare Robert Gabriel Mugabe Airport [30]
Victoria Falls Victoria Falls Airport
Bulawayo Joshua Mqabuko Nkomo International Airport

Fleet

Current fleet

Fastjet operates four Embraer 145 aircraft.

The E145 seats up to 50 passengers. This aircraft operates across all FastJet routes, barring Tanzania.

The airline's name and URL is painted on the body of the aircraft with the company mascot "Mr Grey" placed on the tail of the plane. Touches of red and yellow can be seen on the aircraft's wings and engines.

Historical fleet

Previously, fastjet operated the Airbus A319 and the Embraer E190. Due to passenger load on routes, these aircraft were grounded in favour of the smaller Embraer aircraft.

References

  1. ^ "Start of flight operations (in German)". Archived from the original on 3 December 2012. Retrieved 30 November 2012.
  2. ^ a b c d e f g "Proposed Fundraising". London Stock Exchange. Archived from the original on 8 November 2017. Retrieved 14 October 2017. fastjet has phased out all expatriate staff, concluded the closure of its Gatwick head office and successfully migrated the Head Office from the UK to South Africa.
  3. ^ "Fastjet voted winner of the World Travel Awards for the 4th consecutive time". fastjet.com/. Retrieved 27 July 2020.
  4. ^ "World's Best Low-Cost Airlines 2019". worldairlineawards.com. Retrieved 27 July 2020.
  5. ^ Fastjet could leave EasyJet feeling queasy, Financial Times, 2011-09-28
  6. ^ Stelios's Fastjet to take on long-haul market. The Daily Telegraph.
  7. ^ EasyGroup and Rubicon to study Africa airline. Af.reuters.com (5 December 2011).
  8. ^ Fastjet tickets go on sale Archived 23 September 2015 at the Wayback Machine. Easy.com (13 November 2012).
  9. ^ FastJet shifts focus to East Africa market with Nairobi hub . businessdailyafrica.com (29 November 2012).
  10. ^ "Stock Exchange announcement". 6 February 2013. Retrieved 15 February 2013.
  11. ^ "Fly 540 to cease operations in Ghana". citifonline. 16 May 2014.
  12. ^ "Restructuring of Fly540 Angola and Ghana". Fastjet plc. 29 April 2014.
  13. ^ "fastjet granted Air Operator Certificate in Zimbabwe". London Stock Exchange RNS. Archived from the original on 13 October 2015. Retrieved 7 October 2015.
  14. ^ "fastjet Zimbabwe's inaugural flight". Fastjet. Retrieved 22 January 2016.
  15. ^ "fastjet launches new routes from Zimbabwe". Fastjet. Retrieved 22 January 2016.
  16. ^ a b "Final Results for the year ended 31 December 2015" (PDF). Fastjet. Archived from the original (PDF) on 5 June 2016. Retrieved 2 June 2016.
  17. ^ "Mango boss Nico Bezuidenhout parachutes out of SAA". Financial Mail. Retrieved 19 September 2016.
  18. ^ liezelhill, Liezel Hill (19 September 2016). "Fastjet Drops Airbus Jets for Embraer, Moves HQ to Johannesburg". Bloomberg.com. Retrieved 19 September 2016.
  19. ^ "Fastjet CEO Nico Bezuidenhout to step down". Reuters. 2 July 2019. Retrieved 16 January 2021.{{cite news}}: CS1 maint: url-status (link)
  20. ^ "Fastjet - Shareholders". 28 April 2017. Retrieved 17 August 2017.
  21. ^ a b c "Final Results for the year ended 31 December 2016" (PDF). Fastjet. Archived from the original (PDF) on 31 July 2017. Retrieved 27 August 2017.
  22. ^ "Trading Update". Fastjet. 30 June 2017. Retrieved 27 August 2017.
  23. ^ "Fastjet passenger statistics". Easygroup. Archived from the original on 6 June 2013. Retrieved 2 April 2013.
  24. ^ "Results for the 18-month period to 31 December 2012". Fastjet. Retrieved 1 June 2013.[permanent dead link‍]
  25. ^ "Final Results for the year ended 31 December 2014" (PDF). Fastjet. Archived from the original (PDF) on 22 September 2015. Retrieved 5 June 2015.
  26. ^ "fastjet Plc("fastjet" or the "Company") (AIM: FJET)Interim Results for the six months to 30 June 2017" (PDF). Fastjet. Retrieved 2 February 2021. the successful migration of fastjet's headquarters from Gatwick to South Africa
  27. ^ "Investor Contacts". Fastjet. 15 November 2014. Retrieved 2 February 2021. Registered Office and Head Office fastjet Plc Suite 2C First Point Buckingham Gate Gatwick Airport RH6 0NT
  28. ^ Hill, Liezel (19 September 2016). "Fastjet to move headquarters to South Africa". News 24. Bloomberg News. Retrieved 2 February 2021.
  29. ^ "Investor Contacts". Fastjet. 14 August 2017. Retrieved 2 February 2021. Registered Office and Head Office fastjet Plc 6th Floor 60 Gracechurch Street London EC3V 0HR
  30. ^ "Fastjet Zimbabwe announces new routes - 29 Jan 2020". fastjet.com/. Retrieved 27 July 2020.
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