Update: Fastjet experiencing South African turbulence

Posted on 18 June 2013

British-owned low cost airline Fastjet’s plans to launch its South African operations in the first week of July have hit another obstacle. (Catch up: Fastjet fails to launch.) According to Business Day Live,  the airline company failed to pay a deposit in time to secure the Boeing 737-300 it had planned to use for its Cape Town to Johannesburg route from July 4.

Star Air Cargo CEO Peter Annear confirimed that Fastjet had made an enquiry for an airplane but failed to cough up the deposit on time. “They did make a deposit but we have sent it back. We had other people wanting the aircraft, their deposit didn’t arrive in time and we had to offer the aircraft to the other party,” said Annear.

To add more to the company’s woes, executive chairman David Lenigas announced his departure from the airline earlier this week. Lenigas, who has chaired Fastjet since its creation in 2011, helped establish the airline during the 18 months which were clouded by delays and disputes. However, under his tenure the company witnessed its shares collapse by three-quarters in a year. It is believed that Lenigas left the airline after a  fallout with the new Swiss investors who bought Lonrho, which owns 49% of Fastjet, for R270 million.

Fastjet has been battling to lauch its operations in South Africa since announcing its intentions to take over the now-defunct 1time in December last year.  When the airline failed to acquire 1time, it adopted a different strategy. In attempt to revive its South African operations the airline sought a partnership with president Jacob Zuma’s son, Edward Zuma and local investor Yusuf Kajee before its planned launch in early June. However, despite forging the partnership, the airline failed to hit the South African skyways due to a ‘glitch in the website’ and a disagreement with the Department of Transport. To resuscitate its operations, Fastjet made an arrangement with Federal Air —a local air charter services company in May this year. The airline company was hoping to launch its local low cost service under Federal Air’s licence through a six-month wet lease of a B737-300 from Star Air Cargo, but has failed to pay the deposit for the aircraft.

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Although the company’s plans for a local airline have hit a standstill, its East and West African operations have improved dramatically. Recently, the airline received permission to launch international flights from Tanzania to South Africa, Zambia and Rwanda. Fastjet CEO and Chairman Ed Winter described the news as a step towards achieving their goal of being the main airline  in Africa. “This is a monumental day in Fastjet’s history and brings us closer to our goal of becoming Africa’s first pan-continental low-cost airline,” said Winter.

After receiving the news, Fastjet Chief Commercial Officer Richard Bodin revealed  the airline plans for the new routes.“Fastjet is currently planning a huge sales launch activity that will see it offering its customers never-seen-before fares. We hope to offer early booking passengers fares as low as $100 (one way excluding government taxes and charges) to and from Johannesburg,” Bodin said.

In West Africa, the airline’s fortunes have also changed for the better. Following the acquisition of new international routes, Fastjet released a statement announcing its new ally, Nigeria Red 1 Airways Ltd.  The arrangement  between the two airlines will see flights launched under the Fastjet Nigeria brand while Red 1, who will own a majority of the stake, will fund the new venture.

Despite all the controversy surrounding its low-cost service in South Africa, Fastjet still has its sights on the local market.  “Bringing the Fastjet brand to South Africa is a cornerstone in the creation of our pan-African network.  We remain totally committed to launching the Fastjet brand in South Africa as soon as possible, but given all the time and effort the team has invested over the past months to secure our international route designations, we have taken the sensible decision to prioritize setting up these lucrative and high profile routes first, before turning our attention to launch the Fastjet brand on domestic routes in South Africa,” Winter added.

 Images by Fastjet

Related : Fastjet fails to launch dogged by controversy






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