fastjet reports interim results

fastjet has announced its unaudited interim results for the six months to 30 June 2016 (1H16), including a loss after tax of US$15 million versus a profit after tax of $6.4 million for the same period the previous year.

The company’s revenue for the first half of 2016 has increased year-over-year to $33.1 million from $31.5 million, with fastjet saying its revenue on continuing activities is up 4.8%, yet its operating loss stands at $31 million for 1H16 compared to $12.8 million in 1H15.

Nico Bezuidenhout, who was appointed CEO of fastjet on 1 August 2016, commented, “The first six months of 2016 was a very difficult and challenging time for fastjet. While positive developments included the launch of fastjet flights between Harare and Johannesburg, adverse economic and trading conditions significantly impacted the company’s financial results and passenger numbers.
Having said this, 1H16 still saw a 9% increase in fastjet’s passenger numbers to 398,593 (including fastjet Zimbabwe).

“As a result, my focus since being appointed has been to undertake a fundamental review of all aspects of fastjet’s business model and operations,” continued Bezuidenhout. “My immediate priority is to stabilise the business, reduce costs and ensure that we have the correct fleet size in terms of both
number and size of aircraft.”

fastjet reported that its aircraft utilisation is down by 3% from H115 to 10.1 hours during peak months.

Bezuidenhout went on, “I am pleased to report that this work is beginning to deliver some tangible results. We are relocating fastjet’s head office from Gatwick to Johannesburg (our largest international destination) to both reduce costs and be much closer to our home markets. By the end of the year, our existing fleet of five A319 aircraft will be reduced to three and will be replaced by three smaller leased aircraft, an initiative which is expected to lead to a reduction in seat capacity and trip-cost of approximately 15%.

“We continue to pursue cost-reduction and revenue-generating initiatives and to refine and develop our customer offering and low cost model. Conditions remain very challenging and there is much work to be done. But I am confident that the business is becoming more stable and that we are slowly moving towards a platform from which, in due course, fastjet will be able to consider gradual expansion opportunities and start to deliver on its undoubted potential.”

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