Sir Stelios's FastJet Plans Airbus Addition To Boost Passenger Figures Further

New Venture Not So Easy For Stelios After Delay

Sir Stelios Haji-Ioannou's latest aviation investment FastJet has announced it will add its first 156 seater Airbus 319 to its growing fleet in November.

FastJet, the soon-to-be rebranded Fly540, is a low-cost airline operating in West Africa.

Although the Rubicon Diversified Investments owned company has been rebranded as FastJet, flights will not operate under the brand until November this year. It was reported earlier this year that the launch was planned for October.

Sir Stelios’s easyGroup Holdings owns 5% of Fastjet and has the option to acquire another 10% at a price of 5.2p per share until 2 August 2014.

Passenger figures Fly 5407 for the year ending July 2012 were 60,367 (making its aircraft 65% full), up 48.4% from 40,673 the year before.

The Airbus 319 is well known to EasyGroup's EasyJet airline, having purchased the A319, and A320 in 2009, in part to replace and augment its Boeing 737 fleet.

Media reports last month suggested Sir Stelios Haji-Ioannou, who is both a shareholder and director of FastJet, has the ambitious aim of eventually carrying 12 million passengers a year.

It is an undertaking that will reportedly require a 40-strong fleet, but could create £0.6bn in turnover business.

EasyJet staff celebrate the launch of its Airbus 319 in 2009

Tom Rees, senior travel analyst at Mintel, said the addition of an Airbus was an indication of FastJet's intention to expand passenger numbers.

Rees added that while some may believe EasyGroup's success with low-cost airline EasyJet would mean FastJet will look to expand into Europe, it was more likely that FastJet would focus on growing in Africa first.

"Part of the reason for investment is to get into the African market first," Rees continued. "The expansion of the fleet will be to continue growth in the region and cover areas they're not currently servicing on the continent.

"If FastJet follows the EasyJet model there's every chance it will be a success."

The rising cost of oil, prohibitively expensive air tax in the UK and other costs facing low-cost airlines would make it "very hard indeed" to enter FastJet into the European market at the moment, Rees added.

Established in 2006, Fly540 has a fleet of ten aircraft operating from four regional bases in Kenya, Tanzania, Angola and Ghana.

Day-to-day control of FastJet will fall to chief executive designate Ed Winter, formerly of British Airways’s low-cost airline GO and EasyJet.

Speaking to Proactive Investors in June, Winter said: “Air travel in Africa in general has been reserved for business people or a thin strata of society, high-wealth individuals.

“The ordinary man in the street either doesn’t travel, or if he does he travels long, dangerous journeys by bus or car. This inhibits him from travelling. It means that he can’t visit relatives or go where his skills are needed. We aim to democratise air travel.”

Winter added that FastJet was in discussions with the four hub nations' authorities about reducing air taxes as some are prohibitively high; Ghana, for example, charges £38 departure tax.

At the time of going to press, FastJet's share price was 3.4 pence, having peaked at 4.2 pence per share shortly after the Airbus and passenger figure announcement.

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