African carrier Fastjet has announced losses of $47.6 million as it steps up plans to expand from Tanzania into South Africa, Zambia and Zimbabwe.
The budget airline, which Easyjet founder Stelios Haji-Ioannou helped set up, said despite the losses it doubled revenues in 2013 from $21 million to $53.4 million and increased average revenue per passenger from $46.3 million to $95.2 million.
It also this week confirmed it has “disposed” of Fly540 Kenya, after it contributed to the majority of the losses and wasn’t deemed “economically viable”.
Fastjet CEO Ed Winter said the decision to cut its ties with Fly540 is a “hugely significant step” in the future of the airline.
“After a thorough and lengthy evaluation of Fly540 Kenya, we concluded that converting the business into the Fastjet low-cost model would not be economically viable,” said Winter.
“Disposing of our investment in Fly540 Kenya allows us to pursue our priority objective of creating Fastjet Kenya as a new entity which will operate to the same low-cost model, international standards of safety, reliability and punctuality as Fastjet Tanzania.”
In April the airline raised $25 million from share sales to help fund its African expansion.
Fastjet, which began domestic flights within Tanzania in 2012, started international services when it launched flights from Dar es Salaam to Johannesburg in October, and is now also flying to the Zambian capital Lusaka.
The Fastjet brand is being used under licence from Easygroup, while Haji-Ioannou also acted as an adviser in the setting up of the airline.
Fastjet.com