Tuesday, October 1, 2013

■ TANZANIA: fastjet posts $24.9million loss for 1H 2013; turns to Zambia, Malawi for next route roll out.

fastjetfastjet (FN) has announced a USD24.9million EBIT loss for the first half of its 2013 Financial Year ended 30 June 2013. In its statement, the company said that its Tanzanian LCC is now profitable "on an underlying route level basis", though it did post operational losses of USD9.1million and USD4.2million in 1Q and 2Q of this year respectively.

Noting that the interim results also include start-up losses associated with launching fastjet Tanzania in 2012, the company remained optimistic about the future expecting its financial situation to "considerably improve in the second half of 2013." With further network expansion planned - Malawi and Zambia flights now mentioned - fastjet "fully expects to become profitable."

Among the most notable developments listed are:
  • Net cash at June 30, 2013 was USD4.4million. Subsequent to this USD9.3million (gross) has been raised via equity issuance.
  • fastjet Tanzania achieved USD81 revenue per passenger in June - almost double January's achieved rate of USD46.
  • Tanzanian operation is now profitable on an underlying route level basis; and based on current performance once scale increases with additional routes and fully utilised resources the business is expected to become profitable at the EBIT level.
  • Growing endorsement of the fastjet brand and low cost airline model by Tanzanian consumers
  • Development of an Airline Management Services organisation, enabling the fastjet brand to be rolled-out more rapidly across Africa; reducing shareholder risk and minimising capital requirements is underway.
  • Restructuring of the legacy Fly540 businesses progressing well; further progress will be reported in due course; a further USD5.7million of goodwill and intangible assets, and USD8.8million of investments written down in the period.
fastjet's CEO and Interim Chairman, Ed Winter, commented:
"Building on our existing operation and the strong consumer faith in our brand, we are moving ahead with our growth plans and plan very soon to launch our first international route from Dar es Salaam to Johannesburg. We expect to add further international routes over the next few months, including to destinations in Zambia and Malawi.  In addition to this, we will be adding a fifth city, Mbeya, to our Tanzanian domestic network from November 1 following completion of the redevelopment of Songwe airport to accommodate modern jet aircraft."
The airline says that once operations in South Africa are fully consolidated and profitable, it will turn its attention to the South African market.

No update on the operation's Ghana and Angolan divisions was issued.

Download the full communique here.