LONDON (Alliance News) - Low-cost African airline Fastjet PLC Friday said it had now "temporarily" suspended the operations of its loss-making Fly540 operations in Ghana and served notice on the leasing agreement on the leased ATR aircraft it has in the country.
Fastjet said last month it was going to restructure the legacy Fly540 businesses in Ghana and Angola, and it took two ATR aircraft that it owned itself and previously operated in those countries out of service to be sold. At that time, it suspended the Angolan operation because its two leased aircraft in that country were in maintenance, but it had continued with the single leased aircraft in Ghana until now.
Fastjet was founded when Rubicon Diversified Investments bought Fly540, which flies in Kenya, Ghana and Angola on a traditional rather than low-cost model, from Lohnro in a reverse takeover in 2012. It was backed by billionaire and easyJet PLC founder Stelios Haji-Ioannou, which took a stake in the company as part of a deal that included licensing the FastJet name.
Since then FastJet has been shrinking and restructuring the Fly540 operations in an attempt to make them profitable, while focusing on growing its own-brand operations. Those own-brand operations are mainly within Tanzania, but the airline has recently launched some cross-border routes including to Johannesburg in South Africa and Lusaka in Zambia.
"As previously announced, fastjet has concluded that although Ghana presents very significant long-term opportunities for the fastjet low-cost model; in the short term the company intends to fully focus on the considerable potential of opportunities in East and Southern Africa, and this legacy 540 operation is not therefore part of the core low cost fastjet model," it said in its statement Friday.
Fastjet shares were up 0.8% at 1.94 pence Friday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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