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

Should you buy Vodafone shares, or steer clear?
Share tips

Should you buy Vodafone shares, or steer clear?

Vodafone grew revenue by 4% and profit by 11% last year, and offers investors a 6.4% dividend yield. So should you buy Vodafone shares? Rupert Hargrea…
17 May 2022
Melrose Industries: a British manufacturer that is well-placed for recovery
Share tips

Melrose Industries: a British manufacturer that is well-placed for recovery

Melrose, the aerospace and automotive manufacturer, has been hit by the pandemic, but the shares are unduly cheap says David J Stevenson.
17 May 2022
Avoid easyJet shares – there are better airlines to invest in
Share tips

Avoid easyJet shares – there are better airlines to invest in

EasyJet used to be one of Europe’s most impressive airlines. But now it is facing challenges on all fronts and losing out to the competition. Rupert …
16 May 2022
Britain’s ten most-hated shares – w/e 13 May
Stocks and shares

Britain’s ten most-hated shares – w/e 13 May

Rupert Hargreaves looks at Britain's ten-most hated shares, and what short-sellers are looking right now.
16 May 2022

Most Popular

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
High inflation will fade – here’s why
Inflation

High inflation will fade – here’s why

Many people expect high inflation to persist for a long time. But that might not be true, says Max King. Inflation may fall faster than expected – and…
13 May 2022
Is the oil market heading for a supply glut?
Oil

Is the oil market heading for a supply glut?

Many people assume that the high oil price is here to stay – and could well go higher. But we’ve been here before, says Max King. History suggests tha…
16 May 2022