THE LEX COLUMN: Fastjet has a hard landing in Africa
The airline struggles with profitability on the continent because of slow growth and competition from state carriers
A particularly shambolic West African airline once sought to woo passengers by telling them rates of luggage theft had fallen. It was an indicator, if one were needed, that standards in the African passenger aviation market are not set dauntingly high. Yet Fastjet, a low-cost African airline set up with backing from EasyJet founder Stelios Haji-Ioannou, admits it may struggle to survive. It has cash of $3.9m, of which $3m cannot easily be removed from Zimbabwe. In the first half, Fastjet was making operating losses of around $500,000 a week. London-listed Fastjet is desperately seeking fresh investment, despite having raised $10m in July. The group’s chances of matching the fabled longevity of its emblem, an African grey parrot, look slim. Fastjet’s woes are themselves emblematic of the mismatch between Africa’s rich economic potential and its modest achievements. On paper, a low-cost airline should fly. Africa accounts for about 15% of the world’s population but less than 3% of the...