Budget airline loss falls as passengers now peak 1.5m

By The guardian reporter

An airborne fastjet aircraft. Tanzania-based Africa�s low-cost airline seeks to ultimately link up major cities such as Dar es Salaam, Johannesburg, Harare, Lusaka, Nairobi and Lagos.

Budget airline, fastjet Tanzania has carried over 1.5 million passengers since its inception in 2012 with a 26 per cent reduction in operating losses during the year ended June 30 compared to same period last year.

 

The carrier reported a 2015 half-year net loss of US$10.1 million on Monday, nearly halving the US$20 million interim loss it posted in 2014. 

 

It warned in a statement that the second half of the year will be worse than originally forecast.

 

In its latest half year results, the discount airline said its passenger numbers surged by 56 per cent as the fleet size increased from three A319 Airbus jets to five. 

 

The six aircraft was acquired last week.

 

The report said the low-cost airliner’s carried the largest number of passengers last month, when it recorded 75,000 people.

 

 “The improvement in the financial results set out in this interim statement compared to the corresponding period in 2014 result from greater utilisation of the fleet from steadily increasing demand across the network,” said Clive Carver, interim Chairman of  the airliner’s board of directors.

 

FastJet, which seeks to become the first discount airline with a network spanning sub-Saharan Africa, said it expects to make loss again this year. Sectoral insiders now estimate 2015 losses at US$31.1 million, compared with US$19.5 million previously.

 

Mr Carver said the loss would emanate from slower than anticipated route development and the impact of weak African currencies, in particular the Tanzanian shilling against the US dollar.

 

“We now expect trading in the second half of 2015 to be materially behind management’s expectations. The board has not adjusted its forecasts for 2016,” he said.

 

Chief Executive Officer Ed Winter said fastjet flew 10,000 seats a weeks on 76 flights in Tanzania, which is the base of its operations. Its nearest competitor, Precision Air, offers about 4,700 seats on 73 weekly flights according to OAG Analytics data for August 2015. 

 

“During the first half of this year, fastjet Tanzania increased capacity from 330,050 to 518,230 seats,” Mr Winter noted. 

 

As a low cost airline, fastjet strips out many of the traditional services of a full fare carrier and excludes extras such as baggage and meals on board, giving the passenger the option to purchase them as add-ons if required, the half year results concluded.