Another Low-cost airline ‘Fastjet’ is on the verge of collapse, as it warned of no guarantee of a successful outcome
The Tanzania -based, African Low-cost carrier, founded by EasyJet fonder Sir Stelios Haji Ioannou, earlier warned that it may not be able to continue trading if funds were not raised.
Fastjet has been beset with problems since launching in 2012, and reported a half-year operational loss of $14.6 million in June 2018. As of September its cash reserves are only $4.2 million but $2.8m of this is restricted cash held inside Zimbabwe.
The Airline said today that it needs fresh capital injection or reach an agreement with its main creditors in the coming days, otherwise it would be not be able to continue trading.
Operating cost are much higher Africa compared to Europe because difficulty in securing bilaterals in an overly protective environment, and high fuel taxes and government fees. Also forward booking activity in Africa is much lower, resulting in cash flow challenge.
Apart from all these, most of the airline’s issues were down to self-inflicted, and its run out of time…
However, airline said in a statement on Friday “discussions to date with certain shareholders and creditors have been positive, discussions are ongoing and there can be no guarantee of a successful outcome,”