in Air Transport / Business & Finance

Fastjet's losses deepen as LCC continues stabilisation plan

Posted 31 May 2017 · Add Comment

African low cost carrier Fastjet has seen losses almost double in what CEO Nico Bezuidenhout described as “a challenging year”.

Bezuidenhout has been leading a restructuring following a disastrous period of rapid expansion – that restructuring is still underway the company said as it abnnounced the financial results today.
The airline has a four point plan to make the turnaround:
o Major cost reductions
o Fleet transition to smaller aircraft
o Head office relocation to Johannesburg
o Revenue initiatives including route rationalisation
In its full-year results for 2016, it said losses before tax soared from $21.6m to $47.9m, as costs increased by 29% caused by increased capacity and start-up losses on new routes.
Bezuidenhout said: “2016 was a challenging year and these financial results reflect not only a difficult market place but also the overly optimistic expansion plan adopted in early 2015.
“Since I became CEO on 1 August 2016 we have successfully initiated a Stabilisation Plan to address the immediate challenges. However, although good progress has been made many of the Plan’s benefits to reduce our cost base, and match capacity with demand, have naturally taken time to feed through and as such will only be materially realised in 2017. Nevertheless, the effects of the Stabilisation Plan in the second half of 2016 saw Fastjet withdraw from a number of loss-making routes and remove surplus capacity such that while between July and December, capacity was reduced by 25%, passenger numbers were only down by 3% and revenues rose by 5%.
“The final stages of the Stabilisation Plan are now implemented and the strong progress we have made means that Fastjet’s cost base will be significantly reduced by the third quarter of 2017 and that we are well on the way to fulfilling our baseline aim of achieving a cash flow break even position by the fourth quarter of 2017.
Since the year-end, Fastjet has completed a US$28.8m fundraising, entered into a strategic and operational partnership with Solenta, and significantly strengthened our Board. With these initiatives building on the benefits of the Stabilisation Plan, and although a number of challenges remain, fastjet is now close to being sufficiently stable and well positioned to be able to consider disciplined growth opportunities in our target African markets.”


 

 

 

 

 

* required field

Post a comment

Other Stories
Advertisement
Latest News

Kenya Airways expands codeshare with Alitalia

Kenya Airways has signed an enhanced codeshare agreement with Alitalia (a partner airline in the SkyTeam alliance), creating additional connectivity to the networks of the two airlines, into Africa, Europe, the Far East and South

Embraer Phenom 300 is world’s most delivered llght jet

Embraer Executive Jets delivered 51 Phenom 300 and Phenom 300E light jets in 2019, making it the most delivered light jet of the year.

USAF C-130 supports Flintlock 2020

A United States Air Force (USAF) C-130J Super Hercules aircraft and Airmen assigned to the 37th Airlift Squadron, 86th Airlift Wing, Ramstein Air Base, Germany, deployed to Senegal and Mauritania to support and participate in

Green Africa adds three more A220-300s to its fleet

Green Africa has added to the news that it has ordered 50 A220-300s from Airbus by also committing to lease an additional three of the aircraft from leasing company, GTLK Europe.

Beechcraft King Air 350ERs begin maritime patrol duties

Leonardo has revealed that two Beechcraft King Air 350ERs, equipped as Maritime Patrol Aircraft (MPA), have gone into service with an African Navy following their delivery by the Company, which acted as prime contractor and systems

Boeing to support communities affected by Ethiopian Airlines Flight 302

Boeing has announced it has dedicated the remaining $50 million of a previously announced $100 million fund to support humanitarian needs in communities affected by the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents.

AVAFA20SK2207050320
See us at
AVAFA20BT2207050320AVMENA20 BT1309100620