FastJet Finally Exits West Africa With Fly540 Ghana Stake Sale

FastJet Finally Exits West Africa With Fly540 Ghana Stake Sale

Africa-focused budget Airline FastJet  has sold its stake in loss-making Fly540 Ghana for a nominal $1 to DWG-G Company, and said it has effectively ceased all business in the West Africa market.

Fastjet acquired Fly540 Ghana in 2012 from Lonrho Aviation, only for the airline to be suspended in May 2014. The airline reported a $11.3 million loss last year, Fastjet said.

“The disposal of Fly540 Ghana is a great step forward in fastjet’s restructuring plans for our legacy businesses,” Fastjet’s chief executive Ed Winter said.

“Whilst West Africa remains of interest to us as a low-cost market in the future, our current focus is on expanding our footprint in Eastern and Southern Africa.”

“Fastjet has retained the right to discuss the introduction of the Fastjet brand in West Africa when it considers the economic conditions and infrastructural environment to be more favorable.”

Fastjet is also the holding company of Fly540 Angola where operations are currently suspended.

The company, which hopes to be the first Pan-African low cost carrier, raised $74 million through share sale in April to help it expand its fleet and routes on countries on the continent including South Africa, Zimbabwe, Kenya Uganda and Zambia, Reuters reports.

According to an analysis by CAPA in December last year, Fastjet was targeting to finally expand its fleet in 2015 and launch a second affiliate, but was facing challenges in stiff competition from new low-cost carriers and regulatory resistance in some markets.

Many low-cost carriers have failed in Africa where they struggle to compete with the national carriers that are beneficiaries of subsidies from governments. A number of national carriers also benefit from patriotism.