Fastjet’s New CEO Mulls Smaller Planes to Revive Africa Airline

  • Nico Bezuidenhout also planning head-office move from London
  • Former South African Airways executive takes up post on Aug. 1

Fastjet Plc’s new chief executive officer said he may replace the African discount carrier’s planes with smaller ones and move its head office to a city somewhere on the continent from London to help end losses.

The Airbus Group SE A319 jets used by Fastjet may be too large for the markets they serve, Nico Bezuidenhout said in an interview. It also doesn’t make sense to run an African airline “from 5,000 kilometers away,” according to the executive, who moves to his new post from South African Airways on Aug. 1.

Former Fastjet CEO Ed Winter quit amid clashes with investor Stelios Haji-Ioannou after warning that full-year earnings would miss analyst estimates and that the company was running short of cash. Bezuidenhout, 39, said the carrier must modify the low-cost model to better fit Africa’s operating environment.

“Work could be done in terms of Fastjet’s distribution network, refining its cost structure, evaluating and matching its fleet to market demand,” he said Wednesday at Bloomberg’s Johannesburg bureau. “Just that alone should get the business close to a break-even position.”

Too Big

Fastjet operates five A319s from bases in Tanzania and Zimbabwe after terminating the lease on a sixth in April, serving destinations in South Africa, Zambia, Uganda and Kenya, according to its website.

Bezuidenhout, who made his reputation running SAA’s Mango unit and in stints as acting CEO of the group, said he’ll need to study operational data but suspects that the Airbus jets, configured with 145 to 156 seats, are too big and may need to be returned early.

That might point to a switch to the largest regional jetliners. Fastjet said a year ago that its fleet could reach 34 planes by the end of 2018, though mounting losses have since forced it to rein in even its current network.

The CEO-designate also plans to evaluate Fastjet’s route network, citing its Dar es Salaam to Zanzibar service as one that doesn’t appear to make sense because the journey time is so short given the fixed costs.

The airline could reduce costs and better understand its markets by moving its headquarters to Africa, with either South Africa or Tanzania the most obvious choices, Bezuidenhout said. A realistic target would be to complete the move within six to 12 months of starting the job, he said.

Efforts by some African governments to accelerate the liberalization of air transportation on the continent will also bolster Fastjet, the executive said.

Bezuidenhout said he respects the entrepreneurial credentials and business acumen of 12 percent shareholder Stelios, the EasyJet Plc founder who goes by his first name and who last week backed the new CEO’s appointment.

“He’s a vested stakeholder and you have to assume that he wants what’s best for his investment,” he said. “I’d be looking to find a way to cooperate with him and work with him and obviously draw on his knowledge and strengths.”

Fastjet will hold a shareholder meeting on June 28 to consider the future of Chairman Colin Child, who Stelios wants to force out. The airline said in a statement Friday that Child was instrumental in hiring Bezuidenhout’s and urged investors to back him.

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