African Discount Airline Courts Big Oil as Fleet Grows
FastJet Plc (FJET), seeking to become the first low-cost airline spanning sub-Saharan Africa, said it has held talks with potential clients at embassies and international oil companies in advance of its first flight next month.
The carrier also plans to offer allocated seating for an extra fee to meet interest from corporate passengers, though the primary focus remains a pent-up market for visits to friends and family, Chief Executive Officer Ed Winter said in an interview.
FastJet is close to sealing a deal for “a few more” of the Airbus SAS (EAD) A319 single-aisle planes with which it’s building its fleet, Winter said, adding to an aircraft it agreed to lease from BBAM LLC, formerly Babcock & Brown Aircraft Management. The company aims to have five A319s in operation within six months and 15 by the end of the first year of operations, he said.
“We’re applying European standards whether required or not and making reliability the selling point, which is attractive to lots of customers,” Winter said. “Business travelers want to be first through immigration and first on and off the plane, especially in Africa, so we need to offer allocated seating.”
Shares of FastJet rose for the first time in seven days and were trading 1.4 percent higher at 3.68 pence as of 11:22 a.m. in London, their biggest gain in three weeks.
The reservation system will most likely be branded FastSeat, according to Winter, who said his company has been in contact with diplomatic services including the U.S. embassy in Ghana, which he says is Africa’s biggest with 5,000 staff.
Oil and mining companies are also being courted, and will most likely conduct an audit of FastJet’s operations when it is more established, Winter said, adding that some governments and companies will sanction travel only on approved carriers.
FastJet, backed by EasyJet Plc (EZJ) founder Stelios Haji- Ioannou, plans to establish bases in Tanzania, Kenya, Ghana and Angola with licenses held by majority owner Lonrho Plc (LAF), an oil, mining and agricultural group active in Africa for 100 years.
The carrier will deploy its first plane in Dar es Salaam, capital of Tanzania, from where it plans to commence operations with services to Nairobi. The Tanzanian market can probably support five aircraft and Kenya a further 10, Winter said.
The jets that FastJet is close to accepting have not been sourced from BBAM, Winter said, with the market for the 156-seat A319 becoming tighter after deals involving Sky Airline of Chile and U.S.-based Allegiant Air, which this month agreed to take nine planes from General Electric Co.’s leasing arm.
FastJet may move toward purchasing its own planes in three to five years, with the Airbus A320 neo and Boeing 737 MAX the most likely contenders, Winter has said. With the initial five jets the airline will have a capacity of 1.5 million passengers a year, double that of Lonrho’s existing Fly540 division.
To contact the reporter on this story: Chris Jasper in London at email@example.com