FASTJET LOSSES SWELL TO 48 MILLION US DOLLARS IN 2016
(Posted 07th June 2017)
Losses accelerated for Fastjet PLC, a company quoted on the London Stock Exchange, as they reached a level of over 48 million US Dollars compared to 2015, when the company wrote a 21.9 million US Dollars loss into their books.
CEO NicO Bezuidenhout was swift to blame the former management for overly ambitious expansion plans but had to concede that the economic landscape in Tanzania and Zimbabwe, the two countries Fastjet is operating from, was also not helpful to turning the airline’s fortunes around.
Nico’s first action as CEO was to move the company head office from London’s Gatwick Airport to Johannesburg – notably did no one from the company have time to meet this correspondent during a recent visit to South Africa – before engaging in a shoot from the hip aircraft replacement programme which backfired badly as the envisaged leases of Embraer E190 aircraft were largely rejected by the regulators insisting that an amendment of the respective AOC’s was required first before giving permission for phasing out the loss making Airbus A319 models.
Rescue came in the form of Solenta Aviation which acquired a major share package in Fastjet and then seconded first one Embraer ERJ145 to the Zimbabwean operation before adding a second such aircraft, reducing seat capacity from the large A319 to a more appropriately sized plane taking into account passenger numbers into and out of Harare.
All but one of the Airbus A319’s – only one was ever owned and subsequently sold while all others were leased – were disposed of while the company, as reported yesterday, now plans to acquire two Embraer E190’s for deployment in Tanzania.
Revenues for 2016 reportedly rose by 5 percent to 68.5 million US Dollars while expenditure rocketed to US Dollars 95.4 million US Dollars according to figures published.
Loadfactors, a key element for LCC’s were down to a mere 53.7 percent for the year 2016, a fact taken out of regular monthly reporting last year when the trend became apparently too sustained to continue sharing with the public.
Fastjet has in recent months loaded their executive suites with top heavy management, as was reported here at the time, recruited from Nico Bezuidenhout’s former employers South African Airways and Mango. While several senior executives had opted to leave the company rather than move to Johannesburg, were the new recruits adding major wage cost again to the airline’s stretched budgets, all in the hope that the new team may finally turn the tide before the shareholders decide that enough is enough.
Nico, in the face of bad results for the last year, decided to remain optimistic though, projecting a full financial turnaround by the last quarter of 2017 but as always can only time tell which way Fastjet will be heading.
Watch this space for regular and breaking aviation news from the wider Eastern African region.