FastJet looks to fund Africa expansion

14 Nov 2012

Lonrho subsidiary FastJet‚ which aims to be the first pan African low-cost carrier and which has attracted speculation as a suitor for failed local low-cost carrier 1time‚ aims to raise US$2.4m by issuing 42.9-million new Fastjet shares‚ to fund expansion into southern Africa.

FastJet executive chairman David Lenigas said in a statement the company wanted to establish a second operating hub for FastJet and the funding would be used to assess the southern African market and interact with an "earlier than expect(ed) opportunity."

The shares for the capital raising were issued at £0.035 per share and Lonhro's stake in Fastjet would fall to 65.8% after completion of the transaction from 67.4%, .

This followed the announcement on 5 November that the airline would start operating from Tanzania with three A319 aircraft.

Lonrho could not be reached for comment‚ but the company has previously refused to comment on the speculation it may be entering the South African market through a bid for budget airline 1time's assets.

1time ceased operating at the beginning of this month and has filed for liquidation with debts of R462m.

FastJet bought low-cost pan-African airline Fly540 in June this year for US$85.7m.

Fly540 has 10 aircraft servicing about 25 regional and domestic destinations‚ carrying 750‚000 passengers a year.

The first flights under the FastJet brand were expected to take place later this month‚ "bringing an entirely new experience to the African market." the company said.

The African aviation market is significantly under-serviced with air travel spending as a percentage of gross domestic product only a fraction of that of other emerging markets.

Source: I-Net Bridge

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