Fastjet posts $40 million first half loss

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Fastjet made an operating loss of almost $40 million for the six months ending 30 June 2013.

The Dar es Salaam-based carrier generated $24.4 million in revenues in the period, compared to $347,000 in the first six months of 2012. However operating charges rose from $2.4 million last year to $65 million.

In an interim trading update, Fastjet says net cash stood at $4.4 million at 30 June 2013 with an additional $9.3 million raised via share issuance.

Fastjet’s Tanzanian operation achieved $81 revenue per passenger in June, almost double January's achieved rate of $46, it says.

“These interim results include start-up losses associated with launching fastjet Tanzania. Of particular note was that the those losses were more than halved in Q2 compared to Q1,” says chief executive Ed Winter.

“Our performance is expected to considerably improve in the second half of 2013 with yields having grown from $42 to US $81 between January and June. As our planned network expansion progresses and scale covers fixed operating costs, we fully expect Fastjet Tanzania to become profitable,” he adds.

The pan-African low-cost carrier says the Fly540 businesses it acquired from Lonrho continued to “seriously under perform relative” to expectations in the first-half of 2013, with an EBITDA loss due to continued Fly540 operations standing at $6.2 million.

With this in mind Fastjet says it has launched a restructuring of its Fly540 operations. This will include reducing its stake in Fly540 Angola, while retaining the right to launch a Fastjet branded low-cost operation in Angola.

In Ghana, Fastjet intends “to significant local equity partner to reduce capital requirements and risk” in Fly540 Ghana.

The airline says a broad review has been launched to increase revenues, reviewing routes flown, reduce costs and seeking local investment. It adds that further funds will need to be raised in the future.

The airline reported an almost $53.5 million loss for the 18 months ending 31 December 2012.