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28 Sep 2015
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Fastjet cuts losses but delays and currency issues set to take their toll

Currency fluctuation and delays in launching new routes are expected to hit second-half profits at African no-frills airline fastjet.

FastJet Africa.jpg

The warning came despite the airline cutting its operating losses by 35% to $12.8 million.

 

First-half revenues in the group’s Tanzania unit rose by 65.8% to $31.5 million.

 

The company has now acquired its first owned aircraft taking the total number in its fleet to six and a new international route has been added between Dar es Salaam and Malawi.

 

However, problems in its source markets are likely to hamper the company in the second half of its financial year.

 

The Tanzanian shilling has fallen sharply against the US dollar since April 2015 and this together with “the tightening in government spending in the months ahead of the elections” has caused a “significant downturn” in revenue per passenger.

 

In addition, international expansion into Zimbabwe and Zambia have been delayed until mid-November and early December respectively.

 

The company said: "As a consequence the board expects the above factors to result in a material increase in the loss expected for 2015."

 

Fastjet said it did expect to meet “market expectations for 2016.”

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