LONDON (Alliance News) - fastjet PLC on Thursday reported a narrowed pretax loss in 2015 as revenue grew on an increase in passenger numbers, although the company said that trading in the second half of the year faced a number of challenges which have carried into 2016.
The African low-cost airline said its pretax loss in 2015 narrowed to USD41 million from USD57.8 million in 2014, as revenue rose to USD65.1 million from USD55.4 million.
During the year, passenger numbers increased by 32% to 787,771 at fastjet Tanzania, although load factor decreased by 6.6 percentage points to 66.7%. Its Zimbabwean airline, fastjet Zimbabwe, also commenced services during the year.
fastjet said 2015 was a challenging year with revenue hit by a weakening Tanzanian economy and exchange rate, and political uncertainty in the country. As a consequence, consumer spending fell which led to lower ticket sales in the second half of the year.
Although overall revenue grew, revenue per passenger fell by 8% once translated into US dollars. In Tanzanian shillings, revenue per passenger would have grown by 11%.
fastjet added that the seasonal increase in passenger numbers experienced in prior years during the first quarter has not occurred in 2016, meaning it still expects to report a loss in the current year.
"Despite the increase in revenues in 2015, the directors believe that the current economic and trading outlook in fastjet's markets remains uncertain. As a consequence, the group expects to continue to experience significant challenges in achieving the increased sales revenue and growth required to be cash flow positive in the short term," fastjet said in a statement.
"2016 will be focused on developing existing routes and operations consistent with the group's long term vision of becoming the first true pan-African low-cost airline. The airline continues to reduce operating costs and overheads and to match capacity to the lower demand now forecast in pursuit of a path to profitability in the medium term," Executive Chairman Colin Child said.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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