By Farayi Machamire
Struggling low cost carrier Fastjet, which operates 92 flights per week in Zimbabwe, is on the verge of collapse and has sent an SOS for new funding from its major shareholders in a last ditch effort to save the company.
This comes as the African budget airline’s shares tumbled by 70 percent on the London Stock Exchange after it disclosed that it was down to its last $3,3 million of cash as of June 18, down from $7,5million on May 24.
In a notice to the London Stock Exchange on Wednesday, Fastjet, which is subject to stringent disclosure rules, said “whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome.”
At the same time, the group said of $3,3million — $1,75 million was restricted cash in Zimbabwe.
The money in Zimbabwe includes unremitted ticket payments stuck in the local banking sector due to the ongoing cash squeeze.
Fastjet said if the fundraise is not successful, it will result in the annual results “not being published and the Company being suspended from trading on AIM (a sub-market of the London Stock Exchange).”
In a subsequent statement yesterday afternoon, Fastjet chief executive officer Nico Bezuidenhout moved to allay fears that operations of the airline across the five countries in Africa will be impacted.
He assured clients that operations will absolutely continue while management, board and shareholders seek to resolve this issue.
Efforts to get a comment from Civil Aviation Authority of Zimbabwe (Caaz) to clarify if they were working with the Reserve Bank of Zimbabwe to pay airlines were fruitless yesterday as the regulator did not respond to written questions sent to them.
Fastjet is a British-South Africa-based holding company for a group of low-cost carriers that operate in Africa.
In order to satisfy local ownership and other requirements, Fastjest set out to create locally incorporated airlines or a series of licencees to operate services, using a common branding, operational standards and sales platform.
The initial operation is now run as Fastjet Tanzania, Fastjet Zimbabwe commenced flights in October 2015, and Fastjet Mozambique in November 2017.
Fastjet’s woes come as Zimbabwe’s flying public were dealt a blow recently when low cost airline Fly Africa Zimbabwe was forced to ground its fleet of aircrafts after (Caaz) suspended its operations on June 14.
The airline had its Air Operator’s Certificate suspended before coming into an agreement with Caaz to switch its aircraft leases. DailyNews