Loss for fastjet

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By TESTCustomwebLP TESTCustomwebLP June 5, 2015 09:00

Loss for fastjet

African low-cost carrier (LCC) fastjet has reported an operating loss after tax of $72 million for the year ended December 31, 2014, compared to a restated post-tax loss of $55.2 million for the prior year. The figure includes losses from Fly 540 Angola and Ghana $27.7 with less than $0.25 million of fastjet Plc cash used in these legacy operations. Income was also affected by impairments of $10.7 million intangibles and termination of easygroup management contract of $2.5 million.

There was a restatement of 2013 financial statements in relation to the 2012 purchase of the Lonrho aviation business. The transaction was treated as an acquisition by Rubicon (now fastjet Plc) whereas it is more correctly treated as a reverse acquisition by Lonrho, as whilst the Lonrho board in practice did not, it could have sought control of the Company. The restatement has neither any cash effect on any of the years concerned nor any material impact on the 2014 trading results, the company said.

During 2014, fastjet Tanzania a full year underlying operating loss before exceptional items of $22.5 million. It posted a full year underlying operating loss after exceptional items of $24.4 million – US$1.9 impairment on intangible items. The airline suffered a50% reduction in year on year EBITDA loss margin.

However, fastJet Tanzania experienced a 106% increase in full year revenues to $53.8 million, compared to $26 million in 2014. The airline increased average revenue per passenger by 26% to $90, compared to $71 in 2013. There was a 64% increase in passengers carried, while Revenue per Available Seat Kilometer (RASK) rose 3% to 7.95c. There was a 20% fall in Cost per Available Seat Kilometer (CASK)to 11.27c (2013 14.13c)

The airline expects significant growth in fastjet year-on-year passenger numbers to continue, with the level of passenger numbers achieved reinforcing fastjet’s stronghold in the Tanzanian market, and the attractiveness of both the low-cost fare structure and operational reputation.

Growth for 2015 expected to come both from the Tanzanian operation and from the addition of new fastjet airlines in Zambia and Zimbabwe.

Fastjet’s Current fleet is now nearly fully utilised – extra capacity is required with a fourth aircraft due to join the fleet in Q3. The aircraft in question will be the first of a number of aircraft that fastjet is planning to add to the fleet this year.

Negotiations on further aircraft underway with target to build a fleet of up to 34 aircraft operating to 40 destinations within and from Tanzania, Zambia, Zimbabwe, South Africa, Kenya and Uganda by the end of 2018.

Ed Winter, fastjet Chief Executive Officer, said: “2014 has seen a significant increase in the number of passengers travelling on our core Tanzanian routes, with revenue more than doubling. Aircraft utilisation grew sharply and average revenue per passenger also climbed with our services such as seat selection proving increasingly popular with customers.

“Strong underlying traffic growth during the year continues to demonstrate that fastjet’s low-cost airline model works in the African market. This growth in traffic underpins our belief that people across Africa are increasingly embracing the travel opportunities offered by fastjet’s safe, reliable, and great value product, with a high percentage of first time fliers.

“fastjet continues on its path of expansion, with new routes in Zimbabwe and Zambia planned in 2015. I look forward to this coming year with great confidence as fastjet leverages its first mover advantage to the benefit of our customers and shareholders.”

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By TESTCustomwebLP TESTCustomwebLP June 5, 2015 09:00