Pan-African low-cost carrier FastJet aims to have leased five Airbus A319s within six months of its autumn 2012 launch, chief executive-designate Ed Winter tells Flightglobal, while its fleet could total 15 jet aircraft by the end of the first year of operations.
A five-year operating lease has already been signed with BBAM for one A319, Winter confirms. That aircraft, MSN 2176, is currently operated by European low-cost carrier EasyJet under a lease that expires in September, according to Flightglobal's Ascend Online database.
FastJet is being funded by London-based investment firm Rubicon, with backing from Stelios Haji-Ioannou's conglomerate EasyGroup - the former parent company of EasyJet.
Describing the 156-seater A319 as the "perfect size for what we want to do," Winter says the unit costs associated with the type will enable FastJet to "stimulate the market" with fares as low as $20. By contrast, unit costs on the smaller Embraer 190 would impede fare discounting, while the larger A320 would be "too big an aeroplane" for FastJet's launch routes.
Winter says four- to five-year operating leases will be signed against all of the initial aircraft deliveries, allowing the carrier flexibility in matching capacity to demand. As most of the A319s in the secondary marketplace are "around seven to eight years old," he adds that lease expiries will coincide with 12-year maintenance check.
Though just one contract has been signed to date, Winter says: "We're in negotiation over a number of other aircraft. All of the major lessors have been in touch with us over the past few months."
Longer-term, the CEO-designate admits that it is "difficult to say exactly how big, how quickly" the fleet will grow. But he is keen to emphasise the vast potential of low-cost travel in Ghana, Kenya, Tanzania and Angola - the four African countries in which FastJet already has air operator's certification, thanks to Rubicon's recent acquisition of Fly540.
"If our customer base only came from within those four countries, and we only had 3% of that [100 million] population, that's 3 million people," he notes. "If they make two [return] trips with us per year, that's 12 million passengers, which equates to about 40 aircraft."
With rapid expansion on the agenda, Winter admits there are unique challenges for low-cost business models in Africa, particularly in relation to costly airport fees and passenger taxes.
Air travel on the continent is currently geared towards high net wealth individuals, he notes, which makes existing air transport services "not particularly price sensitive". Insisting that this must change before the low-cost model will flourish, he says: "We're still in negotiations with quite a few governments around reduction of passenger taxes. That's going to be a key issue for us going forward."
Winter is optimistic about the "very sympathetic hearing" that many authorities have given Rubicon, adding: "They understand quite clearly that their overall tax revenue from aviation is going to increase tremendously."
Last month, Rubicon's shareholders approved the investment firm's acquisition of Nairobi-based low-cost carrier Fly540, which FastJet plans to use as a springboard into both east and west Africa. The $85.7 million deal was structured as a reverse takeover of Lonrho Aviation, the parent company of Fly540, thereby enabling FastJet's management team to tap into the former's local expertise.
Under the terms of a 10-year brand licensing agreement, EasyGroup will own 5% of Rubicon with the option of acquiring a further 10%. Winter and Stelios will be appointed to the board of the investment firm, and EasyGroup will provide consultancy services for FastJet.