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African discount airliner Fastjet Plc will open a base in Zimbabwe this month, after adding an Airbus A319 to its fleet, and another in Zambia by October, Chief Executive Officer Ed Winter said.
The carrier, founded in 2012, is growing its operations across Africa to tap a market of 210 million potential customers in six countries where it sees highest growth, including Kenya, Uganda and South Africa. The company this year raised 50 million pounds ($80 million) through a share issue to fund its expansion plans, including buying outright planes manufactured by Airbus Group SE.
The plunge in oil prices will probably help the company swing to profit, after recording a loss of about $81 million, as it has led to savings on fuel, Winter said in an interview on Aug. 7 in the Zambian capital, Lusaka. Oil purchases now account for about a third of all costs compared with 42 percent previously and the company is planning to hedge fuel to lock in savings over six months, Winter said.
While slowing growth in China may hit commodity-dependent African economies where Fastjet has set its focus, expansion on the continent will still be “huge in comparison with much of the rest of the world,” he said. The International Monetary Fund estimates that sub-Saharan Africa will grow 5.1 percent in 2016, outpacing the global rate estimated at 3.8 percent.
To carry more passengers, Fastjet plans to increase the number of its planes to 34 by 2018 from three now, which it operates from the company’s core base in Tanzania.
The carrier will name its first aircraft in Zimbabwe after Cecil the Lion, whose killing last month by an American dentist in an illegal hunt shone a spotlight on wildlife conservation in Africa, Winter said.
The route will go between the capital, Harare, and Victoria Falls, a popular tourist destination. In Zambia, Fastjet plans to fly between the capital, Lusaka, and Ndola in the northern Copperbelt province.
This article was written by Matthew Hill from Bloomberg and was legally licensed through the NewsCred publisher network.