#Fastjet announces the latest financial results


(Posted 28th September 2018)


Revenues rise year on year from 21.2 million USD to 30.1 million USD

Loss increases year on year from 13.2 million USD to 14.6 million USD

Those were two of the key elements of the airline’s announcement in London yesterday when the H1 of 2018 results were published.

Key highlights, published below, point to continued regulatory interference and probably deliberate delays by Tanzanian aviation authorities in the registration of the airline’s ATR aircraft which were due to be deployed months ago. This suggests the full extent of what the Tanzanian government is prepared to inflict on an investor in favour of building up their hitherto almost moribund national airline, tilting the playing field and further eroding international market confidence, in part also following their decision to prohibit international arbitration, leaving investors with grievances at the mercy of a local court system under the thumbs of the powers that be.There is now a distinct possibility that, as a result of such regulatory shenanigans private airline will be pushed to the wall by creating a heavily tilted playing field in favour of Air Tanzania. It seems obvious that after serving the Tanzanian market faithfully for many years and making air travel affordable for their tens of thousands of passengers, they have served their purpose and can now go – and when that happens can ticket prices once again shoot through the roof, hitting tax payers twice.

Key Operational Details

Fleet adjustments year on year delivering clear benefits as revenue per available seat kilometre increased by 34% due to:

o Growth in yields of 23% year on year;

o Growth in passengers carried of 19% year on year;

o Growth in load factors of 10% year on year;

Tanzanian market and economy struggling with an ingrained “below cost yield” embedded into the fare structures and competitors, continue to be expected by travellers and offered by the market and our competitors;

In addition, regulatory delays have impacted us significantly with inability to deploy our ATR72-600 fleet there still;

· Mozambique as our newest market, launched only in November 2017, is showing good growth potential with strong government and regulatory support to welcome and support fastjet into Mozambique; we achieved a 67% load factor during the first half of 2018, encouraging and justifying fastjet to add further capacity on existing routes, and start new routes, after less than a year of operation.

· Zimbabwe experienced significant revenue growth of 123% year on year, driven by passenger growth of 70% year on year on the back of a 70% capacity increase, and yield growth year on year of 32%; all these were achieved by vastly increased frequencies on the core Johannesburg-Harare and Harare-Victoria Falls routes, with the smaller gauged ERJ145 50 seater fleet;

· A new full content agreement with Africa’s leading Global Distribution System (Travelport) has ensured fastjet inventory availability through the majority of travel agents in key markets;

· Network on-time performance at 85% monthly aggregate;

· Further interline agreement signed with Qatar Airways in process of implementation;

Report Highlights

  • Revenue growth is driven by capacity and fleet increases year on year following Stabilisation Plan adjustments initiated in 2017;
  • Successful capital raise of $10m in July 2018 to fund working capital for current operational period;
  • Recent changes in the competitive landscape in Tanzania have caused the Board to evaluate fastjet’s Tanzanian operations and the consequential financial impact of continued losses in this operation, which could include ceasing operations in country;
  • The Directors are still encouraged by trading in the Zimbabwean and Mozambique markets, but the headroom of freely usable and available cash resources is minimal and the company’s ability to continue as a going concern remains very sensitive to its future funding requirements; and
  • Additional funding will be required by the end of October to enable fastjet to continue operating; The Company is currently in active discussions with its major shareholders regarding a potential equity fundraising, in the absence of which the Group is not able to continue trading as a going concern. Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome.

Comments made by Fastjet CEO Nico Bezuidenhout reflect on the challenges the airline has as a result of market interference, further highlighted in a just published PodCast by Jon Howell of AviaDev, who caught up with Nico and had him give an exclusive 15 minute interview – link shown further below:

Despite achievements in Zimbabwe and Mozambique, the Company continued to face several challenges during the period and early part of Q3 2018, with regulatory delays in Tanzania and a sub economical yield environment, and because of this, we have been unable to deploy our newly-acquired ATR72-600 aircraft as quickly as anticipated or planned. Other factors impacting fastjet’s performance include interest payments on legacy debt from several years ago and the start- up losses in Mozambique (1H 2018 – loss (US$ 2,668,000); 1H 2017 – US$ 0).

Operating costs such as fuel and maintenance were negatively impacted by currency fluctuation and a rising global fuel price; both the South African Rand and the Tanzanian Shilling lost value against the US Dollar.

Slowed economic growth in Tanzania has also adversely impacted consumer and business travel revenue and the first half of the year saw the available customer pool in-market contract.

Recent changes in the competitive landscape in Tanzania, and the associated impact on the Tanzanian airline and local company have been significant.

Non-executive director Mark Hurst has recently engaged more actively, temporarily assisting and supporting myself in implementing the Company’s strategic plan within all core markets and having these divided equally between us from a leadership and guidance perspective.”


Also see the link of an interview by www.atcnews.org with Nico and an earlier interview with the airline’s COO Sylvain Bosc: