Fastjet's rocky progress leads to boardroom battles
Fastjet, the fledgling Pan-African low-cost carrier is continuing its rocky road to break-even according to its latest set of figures.
The airline’s 2015 results showed it had narrowed its net losses as it had recorded a deficit of $16.9 million compared to its $58.5 million loss a year earlier.
The report said it had achieved the result through revenue on “continuing activities” up 21% to $65.1 million, up from $53.8 million for the previous year. Passenger numbers had risen by 32% to almost 788,000.
The airline is being held back in its bid to become the first truly Pan-African LCC as it struck difficulties in reaching agreements to launch routes to key countries.
It has also had an internal battle with the airline’s major shareholder – former Easyjet boss Stelios Haji-Ioannou – who has demanded cost-cutting measures, notably moving the airline’s HQ from London to Dar el Salaam, the airline’s home base.
Founding CEO Ed Winter left the airline earlier this year and has not yet been replaced. The discontented directors are now believed to have the executive chairman, Colin Child in their sights.
Haji-Ioannou’s said he “no longer has any faith in Colin Child’s ability to appoint a new CEO in the near future.”
But the management will turn to their successes in the past year and say they are on track. In the annual statement, the company noted that Fastjet Zimbabwe had begun operations and that an equity fund-raising operation had garnered $75 million.
Rationalization of its route network was progressing well as had the disposal of legacy assets in Ghana and Angola.
Child said it had been “a year of change and challenge.” Its Tanzanian operations had made progress, but had been hampered in the second half of the year by a weakening Tanzanian economy, deteriorating exchange rate and political uncertainty in the country.
“These factors have led to a fall in consumer spending and a negative effect on ticket sales.” It said.
The airline said the Group “expects to continue to experience significant challenges in achieving the increased sales revenue and growth required to be cash flow positive in the short term.”
* Fastjet’s Richard Bodin (pictured right) who stepped up from chief commercial officer to chief operating officer following the departure of Winter, will be one of the key speakers at the Routes Africa event which takes place in Tenerife June 26-28.