Figures just released at the London Stock Exchange, where Fastjet PLC is a publicly-quoted company, confirm that Fastjet Tanzania has at last crossed the 1 million passenger mark in December last year. Adding the icing on the cake of crossing that threshold came with the news that Fastjet Tanzania for the first time ever recorded a profitable trading month since it commenced operations.
The result comes as a result of a 20 percent increase in yields per passengers in December, indicative of late bookings at higher fares, leading to a revenue increase of 106 percent compared to December 2013.
This monthly result raises the hopes that should the trend continue of carrying more passengers, and utilizing their aircraft fleet for more hours per day than before, the financial fortunes of the company could rapidly improve, helping to make up the startup losses.
The load factor for December, in spite of more flights, improved by 2 percent over 2013, and the uplift of 65.653 passengers was the best so far in the history of the company. On-time departures, however, took a negative turn to only 89 percent, still high though in comparison to most other airlines in the region. This was largely prompted by delays as a result of several bird strikes caused by the less than satisfactory performance of the bird control unit at Dar es Salaam’s international airport. The information received from London this morning reads in full as follows:
Although the first quarter is traditionally a relatively low demand flying period, trading in the first quarter is expected to be much improved on last year as the excellent growth trends in both passenger numbers and yields seen in 2014 are anticipated to continue and as the Company benefits from lower fuel costs. The number of flights operating has been reduced to match capacity to expected demand and reduce costs.
The fuel price in January will provide a further 13 percent reduction on December prices. The Company expects further reductions in February and March as the recent falls in the price of crude oil continue to flow through to African aviation fuel supplies. As stated last month, fastjet does not currently pre-purchase or 'hedge' its future fuel price. The Company pays current market rates for its fuel and is therefore realising substantial benefits from the reduction in the cost of crude oil.
Although fastjet operates fuel-efficient modern Airbus 319 aircraft, fuel represents a very significant percentage of its direct operating costs. As such, the fall in the price of oil delivers a large direct cash benefit to the airline.
fastjet Tanzania is also celebrating the major milestone of flying one million passengers across the African continent.
This milestone represents another significant achievement for the low-cost airline as it is embraced into the hearts and minds of travellers in Tanzania and further afield across East and Southern Africa.
Commenting on December trading, Ed Winter, Interim Chairman and Chief Executive Officer of fastjet plc, said: "The announcement of our first profitable trading month is a great achievement and a huge milestone on the road to becoming the first pan-African low-cost airline. We have already proven that the low-cost model works to stimulate traffic and we have now shown that it can create a profitable business. The Tanzanian fleet of three aircraft is now producing more than double the monthly revenue compared to a year ago. This higher utilisation, combined with higher per passenger revenues and lower fuel prices, has been transformational for the business."
Fastjet is in coming months working on the completion of the remaining stages of certification towards an Air Operator Certificate in Zambia before commencing flight operations on domestic Zambian and regional routes with Johannesburg already singled out as the likely first international destination out of Lusaka. This will be the company’s second base after Dar es Salaam.
It remains to be seen to what extent Fastjet can operationalize 5th freedom rights granted by the Ugandan regulators, to such places like Juba, Kigali, Nairobi, and Johannesburg as they still await clearance for scheduled flights from their Dar es Salaam base to Nairobi, a process deliberately stalled and obstructed by the Kenyan regulators.
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