Fastjet, operating in Southern Africa, expects profits in 2019
Bengaluru — Low-cost African airline Fastjet expects to be profitable on an underlying basis in 2019, CEO Nico Bezuidenhout said on Thursday, a year after a cash crunch nearly drove the carrier into administration.
The airline, which operates in SA, Mozambique and Zimbabwe, has faced numerous issues related to its dwindling cash pile and was saved from going under after striking a deal to raise funds late in 2018.
Fastjet was also forced to divest operations in Tanzania, its home market, after battling tough trading conditions there. “Last year we took a lot of pain. Aviation is a dragon slayer. Many a good company face difficulties in aviation,” Bezuidenhout said.
Future profitability depends on currency stability in Zimbabwe, where President Emmerson Mnangagwa is trying to repair an economy ruined by hyperinflation and a long succession of failed economic interventions.
“The variable for us is currency. Zimbabwe currency is still a risk,” Bezuidenhout said, adding that his profit prediction is cautious.
The company had an operating loss from continuing operations of $41.2m in 2018. The company is valued at £61.8m as of Wednesday.
Fastjet said profit for 2019 will be helped by demand in Zimbabwe and SA, while the powerful cyclones that hit Mozambique had hurt operations.
Fastjet, which launched in 2012, modeling itself on no-frills airlines such as easyJet and Ryanair, has been working to revive its fortunes. The company has moved its headquarters to Johannesburg from London to cut costs, signed a code-share partnership in Mozambique, changed auditors, and cut its debt, Bezuidenhout said.
He added that liquidity was “tight, as always” and the airline would need funding to expand and grow. “You live and learn and there is a continent to conquer.”