FASTJET PLC EXPECTS INCOME FROM USE OF NAME WHEN BUYOUT OF FASTJET (T) IS COMPLETED
(Posted 10th November 2018)
The ongoing attempt by a group of Tanzanian businesses to buy out Fastjet PLC’s share in Fastjet (T) is aiming to turn the Tanzanian arm of the self professed pan African low fare airline into a fully fledged franchise, retaining the right to use the airline’s well known brand name and benefitting from the association with Fastjet airlines in Southern Africa.Fastjet (T) presently flies out of Dar es Salaam to Kilimanjaro, Mbeya and Mwanza, using Embraer E190 aircraft, but has ATR72 aircraft lined up to serve these and other domestic destinations with more frequencies.
The buyout is anticipated following the appointment / election of one Mr. Lawrence Mwasha to the position of Executive Chairman earlier in the week, just two weeks short of the 6th anniversary of Fastjet entering the Tanzanian market in November 2012.
Since then has Fastjet (T) carried over 2.5 million passengers and earned the holding company major awards as Africa’s best low fare airline from the World Travel Awards and other organizations, besides impressing with a high level of punctuality, over the years remaining well in the 90 percent margin.
Mwasha is a former ruling party senior cabinet minister and the airline hopes that his appointment will put relations with regulatory bodies on level keel again, which are after months of back and forth still sees three ATR aircraft awaiting registration while the route from Dar es Salaam to Kigoma was pulled from Fastjet to give government owned Air Tanzania an unfair market advantage – all actions combined by the aviation regulators best described as deliberately tilting the competitive playing field.
Once the transaction is complete, and negotiations presently focus on the share price for the buyout and subsequent franchise cost, can Fastjet (T) then, as a fully Tanzanian owned airline, hope for a different treatment by government bodies. That said, the confrontational course and style of President Magufuli’s government vis a vis the private sector in general and mining, banking, ICT and airlines in particular has been far from business friendly, reminiscent of the command economy of the 1970’s and 1980’s.
The buyout will no doubt benefit both the Tanzanian operation of Fastjet but also bring financial relief for Fastjet PLC which can then concentrate on the profitable businesses in Zimbabwe, Mozambique and the likely launch in 2019 of Fastjet operations in South Africa, the continent’s most competitive but also lucrative aviation market.
Further updates will be posted here as and when additional information has been confirmed about timelines and other points under negotiation at this time.