FastJet’s ambitious domestic and regional plans slow down

The FastJet takeover of defunct SA airline, 1Time, doesn’t seem to be moving at the pace that its owners might have wanted. The deal is subject to regulatory approval both in the UK and SA, and the SA Department of Transport has been quoted as saying that it might take some time to finalise the buyout, due to lengthy approval processes. Mike Froy, MD of Lonrho Logistics, confirmed that his parent company, which is the major shareholder in FastJet, had been very keen to get the SA operation up and running, but has had to wait for the approvals to be granted. “There has been a delay with the regulators,” he added, “but FastJet is busy working on overcoming all the red tape.” Meanwhile, an FTW contact in the domestic airline industry suggested that the SA Civil Aviation Association (SA-CAA) wasn’t exactly superfast at issuing the appropriate licences for new carriers, and another source hinted that the Competition Commission might also be involved, despite 1Time having already been an approved SA airline operator. There also seems to be a complication in that it has been indicated to us that foreign ownership of SA airlines is capped at 25% to encourage local investments. And FastJet as a company is majority owned (62.74%) by London-based Lonrho, and backed by minority shareholder, Britain’s Sir Stelios Haji-Ioannou, the founder of EasyJet, with 5.05%. FTW has been unable to confirm the location of the “other shareholders” who hold a 32.21% stake. The FastJet/1Time option agreement could see Fastjet join the nation’s aviation market with initial routes serving Joburg, Cape Town, Durban, Port Elizabeth and East London. It would certainly seem that the takeover would meet with unconditional approval from the local airline market, according to Alwyn Rautenbach, MD of Airlink Cargo. “It would be good for SA aviation,” he told FTW. “Budget airlines mean more passengers through the airports, and more work for aviation people. That’s an important consideration.” Rautenbach also pointed out that the new airline wouldn’t lead to any overcapacity in the domestic freight market. Once operational, FastJet is looking to fly a fleet of Airbus A319 aircraft. Said Rautenbach: “Current capacity is sufficient to meet the demand, but the capacity that FastJet would be adding would not be significant.” On the regional side, FastJet has ambitions to build a network across the African continent using its fleet of A319s. “The acquisition of 1time supports FastJet’s growth into a pan-African low cost carrier and the synergies with FastJet’ s existing operations will potentially increase the number of available route networks from SA into the rest of Africa,” FastJet CEO Ed Winter said. The platform for the development of this lowcost carrier for Africa was the acquisition of the airline Fly 540, operating in Kenya, Sudan, Tanzania and Uganda. The airline chose Dar es Salaam, Tanzania, as its first operating base in Africa, with flights from Julius Nyerere International Airport started at the end of November, and connecting with Kilimanjaro and Mwanza airports. On the planning list are flights connecting with Zanzibar Airport. Also on that list are: Kenya’s Moi International Airport in Mombasa; and Nairobi’s Jomo Kenyatta International Airport (intended to become the airline’s base pending government approval). It also aimed at Kigali International Airport in Rwanda; Juba Airport in South Sudan; and Entebbe International Airport in Uganda. Added to the plan was FastJet moving its operations office from Tanzania to Kenya once it had approval to operate in Kenya. INSERT FastJet has ambitions to build a network across the African continent using its fleet of A319s.