British/South African-based holding company Fastjet is not looking to give up on its largest market as it seeks to make crucial moves to save its business.
The Board of low-cost carrier, Fastjet Airlines, will not chicken out of the Tanzanian market, as it has begun plans to engage both the management and potential investors in a move to raise funds and keep the business afloat in the East African country.
The airline has already endured tough economic times that have left the shareholders scratching their heads and raising eyebrows over the survival of the air carrier.
In February this year , Fastjet had achieved a multitude of milestones such as reclaiming its on-time performance delivery, with a 94 percent performance in Tanzania and 91 percent on other operational centers. It unveiled the new Dar-Kigoma route the same month in a bid to keep the aviation competition alive and serve more domestic travelers.
The launch of the additional route to Mozambique and South Africa signified the company’s growth and success in the skies, later in the year. Its demand in Africa created traffic that facilitated its expansion to reach new markets including Zambia and Zimbabwe. So far, the South African market seemed to accommodate its services while Mozambique faced some turbulence due to start-up losses and interest payments on legacy debt.
Since then the airline has faced a cash crunch that has threatened its operations in Tanzania. Fastjet had contemplated the possibility of a pullout from the Tanzanian market should it fail to raise sufficient finances to fund its operations in the nation. The financial crisis had worried investors who threatened to pull out of the business.
According to the company’s General Manager Derrick Luembe, who addressed a local daily over the weekend, he stated that “The Board will also pursue funding to enable it to purchase all equity in Fastjet Airlines Limited held by fastjet PLC and to become a wholly-owned Tanzanian airline.”
The airline has served over 2.5 million passengers in Tanzania, easing the transportation of people and goods by air, both locally and regionally as well as significantly impacting the economy of the state. He added that the budget airline has Tanzanians best interest at heart to add value and quality to their services to keep their customers happy.
According to Thomson Reuters Eikon data, operations in Tanzania account for the company’s 70 percent revenue. With the high figures at stakes, it is working its head out to see its presence salvaged. There is no successful guarantee on the outcome of the discussions despite the optimism from the shareholders, as disclosed by the company.
Drawing similarities with Uganda Airlines, the former flag carrier of Uganda it seems the aviation sector is in need of financiers to support the operations of air carriers. These opportunities can be looked into as investment platforms to create businesses and impact the economic performance of African economies.
Source: The Exchange