fastjet signs agreement to enter South Africa

Africa's low-cost airline fastjet has signed an agreement with South African investment company Blockbuster to operate services in the country.

Africa's low-cost airline fastjet has signed an agreement with South African investment company Blockbuster to operate services in the country.

The venture is aiming to begin flights by the end of May with the first route from Johannesburg to Cape Town.

Blockbuster has struck a commercial deal with Federal Airlines. fastjet, which began operating flights in Tanzania in late November, said the agreement will allow it to leverage Federal Airlines' existing licensing infrastructure and deliver its services to South Africa.

The announcement comes after negotiations over fastjet's bid for liquidated South African airline 1time fell through, as the company felt the value of the business had "diminished over time".

"As there is still no indication that 1time creditors will accept the fastjet offer, the company has therefore chosen to invest in the Blockbuster/Federal Airlines venture to pursue its entry into an important African market and a country well-suited to fastjet's low-cost operating model," the group said.

fastjet has raised additional working capital to assist with the South Africa launch.

The carrier received legally binding commitments to raise £2.0m by way of the issue of 160m new ordinary shares at a price of 1.25p per share.

David Lenigas, fastjet's Chairman said: "Air fares in South Africa have skyrocketed since 1time ceased flying at the end of last year, and many planes are operating at full capacity - specifically on the key Johannesburg to Cape Town and Durban routes.

"Today is an incredibly exciting day for fastjet, not just in South Africa, but across the entire continent. As populations grow and disposable income and consumer spending increases, there is greater demand for affordable air travel. We would like to be part of the solution."

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Why you should stuff your end-of-pandemic portfolio with Chinese stocks
China stockmarkets

Why you should stuff your end-of-pandemic portfolio with Chinese stocks

For an end-of-pandemic portfolio, you need assets that can cope with today’s volatility. And that, says Merryn Somerset Webb, means Chinese stocks.
14 Sep 2020