LONDON (Alliance News) - Shares in Fastjet PLC dropped significantly Wednesday as the company reported a widened interim loss on Wednesday, resulting in the African value airline requiring additional capital by October for it to continue to operate.
Fastjet shares were down 48% at 3.45 pence each in midday trading.
In the six months ended June, the carrier saw its pretax loss widen to USD14.6 million from USD13.2 million the year before.
Although, Fastjet's revenue increased by 42% to USD30.1 million from USD21.2 million.
The widened loss is primarily due to the USD2.7 million start-up losses for Fastjet Mozambique.
The additional costs of related to the delayed deployment of its ATR aircraft in Tanzania resulted in a USD700,000 cost. Fastjet also had to pay a USD700,000 loan to Solenta Aviation Mozambique.
As a result of continued losses, Fastjet said additional capital will be required by the end of October to enable it to continue to operate.
Fastjet said: "Although the long-term benefits of the stabilisation plan have started to be realised with the initiatives yielding positive results thus far, the trading environment has become extremely challenging and the board is taking decisive action in response."
The African airline saw a 19% rise in passenger numbers to 322,590 from 270,836 in the first half. The company said its increased capacity in Zimbabwe was the reason for the growth.
Fastjet Zimbabwe more than doubled its revenue in the period to USD10.2 million from USD4.6 million.
Ticket revenue per passenger, for the entire airline, increased 23% to USD85.96 from USD70.03.
Load factor increased to 75% from 65% a year ago.
The available seat kilometres increased to 336.3 million from 315.9 million but the cost per available seat kilometres increased 22% to USD13.30 from USD10.88.