Fleet Changes Imminent in FastJet

[Phone Wind]

It seems Nico Bezuidenhout is getting ready to make major changes to the fleet mix in FastJet where he took over as CEO last month. The rumours I'm hearing have it that in Tanzania just 1 A319 will be retained and 2 leased E190s will be brought in in November (possibly wet leased from Bulgaria Air). Similarly, the A319 in Zimbabwe will be replaced by a 190. The rumour seems to be strengthened by the new flight schedule which shows the cabin seat layout conforming to the all-economy layout of the 190. It also seems likely that this will be the type the airline will be planning to use in Kenya once its AOC audit is complete.

There's still no firm news as to where the company HQ will be relocated. Nico has said he wants it moved from Gatwick to Africa and the 2 most likely locations would be Tanzania where the majority of the fleet is or South Africa as FJ will still be operating to Johannesburg.

[Phone Wind]

Well, it's all confirmed now that Fastjet is moving its HQ to Johannesburg and the A319s will be gone by the end of September to be replaced initially with 3 wet leased from Bulgaria Air - though it is planned that this will change to a dry lease in April 2017 by which time Fastjet will have its own crews for the type in place

https://skift.com/2016/09/23/the-dream-of-a-pan-african-budget-airline-is-fading/

It will be interesting to see how well the type fares in competition with ATCLs new Dash 8 Q400s as they come into service in the next couple of months

[4runner]

How much of Fastjets demise can be attritibuted to the government of Tanzania vs operational losses?

[Phone Wind]

From everything I've seen, experienced and read; it's almost entirely the fault of senior management which is why Sir Stelios forced the recent change in management

[Phone Wind]

It looks as if Fastjet have cancelled all flights from Dar to Kilimanjaro and Nairobi for at least the next 3 days and halved the number of flights to Mwanza and Mbeya. I have a friend stuck in Mwanza who thinks he'll be there for days unless he decides to spend 16 hours on the bus! It seems that all the 319s have now left except for the 1 which the company owns (and is trying to sell) and the new wet leased aircraft have not announced.
There is a deafening silence from the company about what is happening and a lot of Tanzanians have completely lost faith in them. Not a promising start from Nico; I think people expected much better of him than this:=

[Phone Wind]

Well they haven't arrived in Dar yet which means the entire operation is being carried out by 1 aircraft. That seems pretty appalling planning by any airline which wants to be taken seriously. I've already booked my next flight - with KQ

[Phone Wind]

I'm aware of the 319 in Harare, which is of no use for helping with the routes from Dar, is totally under-utilised, and is due to be replaced by an E190.
FJD, the one remaining in Dar is the one they own and which is up for sale, but that can't do all the schedules which is why so many have been cancelled with no notice to the travelling passengers.
It's no good having new leases starting at end of October when the present ones ended at the end of September. I did hear that 1 190 may be en-route, but that's scarcely likely to be in a position to help out for some days and meanwhile FJs already poor reputation takes another hammering. I'd be very reluctant to use them again even if their fares are cheaper - I prefer reliability :=

[ian16th]

Fastjet Introduces First Embraer 190, Sells A319 | Commercial Aviation content from Aviation Week (http://aviationweek.com/commercial-aviation/fastjet-introduces-first-embraer-190-sells-a319?NL=AW-05&Issue=AW-05_20161004_AW-05_221&sfvc4enews=42&cl=article_6&utm_rid=CPEN1000000974534&utm_campaign=7231&utm_medium=email&elq2=740b5ae0131b4f5a8df4252a5603501e)

[Phone Wind]

The first leased E190 is now in Dar but has not started flying yet. Presumably they're waiting for clearance from TCAA as it''s a new type for them. The A319 they own has been sold (at a considerable loss, though it will put $8 million into FJ's dwindling coffers), but part of the sale agreement is that it can be used (subject to a limit of 100 cycles, for a reduction of $200,00 of the sale price) until 17 October, to allow time for the other 2 leased aircraft to arrive

[Yeah]

FJG is not coming. There are some issues with engine. ERJ still not approved by TCAA. Bulgarian crew still drinking in hotel enjoying contract. Weekend with single airplane operations. Expect many cancellations until Tuesday at least.

[Phone Wind]

Well Fastjet finally got a little bit of its act together yesterday as LZ-BUR did its first commercial flight for the airline.
However, an aircraft in Bulgaria Air colours with Cyrillic script on the side is probably not helping to enhance the Fastjet brand. Also the in-flight magazine still talking about Fastjet's fleet of A319s shows that their PR department has a looooong way to go. Attention to détail seriously lacking.
Let's see how ATCL's new Q400s compare when they start flying this weekend

[Phone Wind]

https://wolfganghthome.wordpress.com/2016/10/25/fastjets-transition-to-a-new-fleet-continues-to-face-challenges/. /
It seems Nico Bezuidenhout is having as many problems in Tanzania and Zimbabwe as he did in SA, overcoming bureaucracy and protectionism. Both Tanzanian and Zimbabwean regulators are putting a lot of obstacles in the way of changing the fleet from A319 to E190. It's also possible that he was rather naive in thinking it would be easy to change his AOC in both countries where he is in commercial opposition to their state-owned airlines.
I wish him good luck - he's going to need lots (because cash is one thing FJ is very short of right now).

[Phone Wind]

The General Manager of Fastjet Tanzania has issued a notice stating that there will be retrenchments of staff in all departments at the end of September 2018 and asking for volunteers for voluntary redundancy in the next few days.
I think the company still has 3 leased ATR 72-600s sitting on the ground in Toulouse which must be an additional drain on their finances. Nico Bezuidenhout seems to have done little to turn the company around, with shares trading at £7.75 - down 68% on the year

[totomechanic]

Grand opening. Grand closing. This airline is the biggest disappointment to me. So much promise and yet so little delivery.

[4runner]

Afrika did them in. A country that is woefully corrupt, inept and underdeveloped that puts obstacles in the way of every attempt to grow and industrialize. Bring the guillotine and round these aholes from government up!

[S speed]

That's sad. I flew with them to Zim before on the 320/319 and it was a rather pleasant experience!

[4runner]

Blame Tanzania. They need Paul Kagame or Donald Trump to come in, clean house of every government employee with a title, stamp or shiny badge, do an audit, out half of those employees in a work/jail program, execute the other half for crimes against humanity, then hire private companies to run stuff.

[Phone Wind]

Fastjet shares are continuing to slide and have fallen a further 3% to a low of 6.65 pence today. This is not as bad as the brief drop to 3 pence in June, but nevertheless continues the steady fall . The company has burnt through over $200 million of shareholder cash in 5 years

[caiman27]

Interim results out today. Operating loss in the six months to 30 June of US$14.6m - losing money in all three countries in which it operates. Subsequently raised US$10m but will run out of money by the end of October. Without additional new money it will have to close. In any case it is planning to pull out of Tanzania due to "changes in the competitive landscape. Shares currently down by 38% so far today.

[Phone Wind]

As with far too many aviation companies, the only people making any money are the directors with ridiculously high salaries and share options. It would be interesting to know how much Nico Bezuidenhout has received for his poorly executed business plan

[caiman27]

As with far too many aviation companies, the only people making any money are the directors with ridiculously high salaries and share options. It would be interesting to know how much Nico Bezuidenhout has received for his poorly executed business plan
Year ended 31 December 2017 he got US$410,000.

Source: Annual Report.

[Phone Wind]

According to ATC News by Prof. Dr. Wolfgang H Thome, Fastjet are pulling the plug on funding for their Tanzanian operations because of unfair and obstructive actions by TCAA and the Tanzanian government.

Disturbing news are emerging from Fastjet’s head office that the airline apparently decided to halt funding for their Tanzanian franchise, the first in the group to take to the skies and for many years faithfully serving Tanzanian with low fares and reliable connections.
It appears, and notably has management not responded at this time to enquiries, that the airline’s top management simply decided that enough was enough, after aviation regulators in Dar es Salaam continued their wait until forever game they played over the airline’s new fleet of ATR72 aircraft.
As said before have the Tanzanian authorities heavily tilted the playing field in favour of their own national airline, with no hesitation over the impact on the industry and the country’s standing as an investment destination – in any case falling apart over the decision to prohibit arbitration and forcing the use of a local court system which is seen abroad as far from independent and allegedly often ready to implement political decisions from the bench.

It remains now to be seen what steps will follow next but with funding from abroad halted is it now anyone’s guess for how long the airline can continue to operate, given the hostile market environment unleashed upon them.

Operations in Zimbabwe and Mozambique however will continue as usual and Fastjet there is fully supported by Solenta, one of the airline’s major shareholders, based in South Africa.

There is growing speculation when Fastjet will announce the launch of operations in South Africa, where Solenta has ready to fly operator permits available, as they incidentally do in several other countries.

Said a regular aviation source in Dar es Salaam when contacted earlier in the afternoon: ‘The writing was on the wall. Our aviation officials delayed delayed and delayed them, which can be seen as obstruction, probably aiming to please their political masters. With Fastjet out of the way will fares no doubt rise and the Tanzanian traveling public will pay the price. Other private airlines should not jubilate, because they too may well be in the cross hairs of those people who want a monopoly again for Air Tanzania which will let them set fares at will. This is a sad day for Tanzanian aviation, for investors in Tanzania, should your story be confirmed‘.


For sure, fares will rise if they leave as the government tries to force out all competitors to the heavily subsidized state carrier (and I wonder how long before that goes back to its previous moribund state, mired in all the debts for all its new aircraft acquisitions?

[Phone Wind]

https://www.ippmedia.com/en/business/fastjet-goes-local-following-uk-based-fastjet-plc-departure

It is being reported that Fastjet Tanzania is seeking funds to keep the airline going and local management is trying to buy the airline. With shares now having slumped to below £0.03 about all that’s left to buy is the airline name.

The only ones to have made any money from this are the overpaid board of directors

[Phone Wind]

Fastjet shares slumped to 1.81 pence today as the company’s RNS announcement highlights that they only have sufficient funding for a few more days operating:
Fastjet Funding Update (http://www.lse.co.uk/share-regulatory-news.asp?shareprice=FJET&ArticleCode=czwlo279&ArticleHeadline=Funding_Update)

Basically, it is able to continue operating beyond the end of October due to some improvement in trading and cash generation. As at 24 October 2018, the Group had cash balances of US$ 3.4m, of which US$ 2.7m is restricted cash held inside Zimbabwe.
Whilst discussions to date with certain shareholders and creditors have been positive, discussions are ongoing and there can be no guarantee of a successful outcome. If the Company is unable to carry out an equity fundraise and/or reach an agreement with its key creditors in the coming days, the Group would be unable to continue trading as a going concern.
Further announcements will be made as appropriate.

It’s not looking good. I just feel sorry for all the employees who have no idea what the future holds for them

[Phone Wind]

There is now an attempt by a group of Tanzanian businesses to buy out Fastjet PLC’s share in Fastjet Tanzania in order to turn the Tanzanian company into a franchise, retaining the right to use the airline’s brand name and benefitting from the association with Fastjet airlines in Southern Africa.

The buyout is anticipated following the election of Lawrence Mwasha to the position of Executive Chairman.He is a former ruling party senior cabinet minister and the airline hopes that his appointment will put relations with regulatory bodies on level keel again, though given President Magafuli’s treatment of many companies since his election, almost like a return to the old days of command economy, I wouldn’t bet on it