LONDON (Alliance News) - Fastjet PLC Tuesday reported a wider pretax loss for 2014 despite, as the costs of winding down the legacy Fly540 airlines in Ghana and Angola and other impairments offset a doubling of its revenue.
The African low-cost airline backed by easyJet founder Stelios Haji-Ioannou reported a pretax loss of USD44.2 million for 2014, wider than the USD32.4 million loss reported in 2013, even though revenue more than doubled to USD53.8 million from USD26.1 million.
Fastjet has wound down the Fly540 operations that were the airlines of its predecessor company, and is now focused on a low-cost airline model that's based in Tanzania, but is expanding from there with routes to neighbouring countries like South Africa and Zambia. It is currently setting up operations in both Zambia and Zimbabwe, and its target is to have up to 34 aircraft operating to 40 destinations within and from Tanzania, Zambia, Zimbabwe, South Africa, Kenya and Uganda by the end of 2018.
The company said fastjet Tanzania experienced a 26% increase in average revenue per passenger in 2014, and a 64% increase in passengers carried, but said it suffered a USD27.7 million loss from its discontinued activities in Ghana and Angola, up from USD22.7 million in 2013.
Its operating loss before exceptional items narrowed to USD30.7 million, from USD33.7 million in 2013, but it then booked a USD10.7 million impairment related to the carrying value of its brand agreement and its Tanzanian air operators certificate and a USD2.5 million charge after it terminated a management assistance contract it had with Haji-Ioannou's easyGroup.
"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," Chief Executive Ed Winter said in a statement.
"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," Winter added.
Shares in fastjet were trading down 3.3% at 110.30 pence early Tuesday.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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