Fly540 Ghana is Kenyan LCC, Fly540's third African hub and its first in West Africa. Fly540 Ghana serves destinations in Senegal and Equatorial Guinea from its Accra International Airport base. Fly540 is currently working with the Ghana Civil Aviation Authority to convert its Air Service Licence (ASL) into an Air Operators Certificate (AOC). In May-2014, Fly540 announced it was temporarily suspending operations in Ghana, pending the restructure of the business.
Location of Fly540 Ghana main hub (Accra Kotoka Airport)
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fastjet is turning its attention to Zambia as the fledging pan-African low-cost carrier group seeks to add at least one affiliate in 2014. The Zambian market is relatively small but has potential and is much less competitive with fewer obstacles than the other African markets fastjet has been looking to enter.
The fastjet group has been preparing to enter the South African domestic market and also has been planning joint ventures in Kenya and Nigeria. But fastjet Zambia could end up becoming the second fastjet-branded carrier, with a potential mid-2014 launch.
Lusaka in Zambia is already in line to be the second international route after Johannesburg for fastjet Tanzania, which is the group’s only existing fastjet-branded operation. fastjet Zambia would also serve South Africa, once again providing new competition for South African Airways in one of its most lucrative markets and potentially diminishing the need for a South African affiliate.
fastjet has reported a USD42 million net loss for the six months to 30-Jun-2013, but its directors remain upbeat about the fledgling African LCC’s prospects, with its Tanzanian domestic operations exceeding expectations and making a profit on an underlying route basis. But the directors acknowledge in the unaudited accounts that the carrier will need to raise further funds in the future “which represents a material uncertainty over going concern”.
fastjet’s ambition to establish Africa's first pan-African low-cost carrier is continuing to encounter strong headwinds. On its own admission, the Tanzanian market is too small to sustain the company and international expansion is critical to its longer term survival.
But the first international route from Dar es Salaam to Johannesburg has, perhaps predictably, run foul of South Africa’s bureaucrats forcing the eleventh hour postponement of the route launch by about two weeks to the middle of Oct-2013. fastjet will compete against South African Airways (SAA) as the only other operator on the route and has promised to reduce fares by 60%. fastjet is taking online bookings for flights departing from 18-Oct-2013.
fastjet has suffered a baptism of fire since entering the African market through the acquisition of the Fly540-branded aviation business of British conglomerate Lonrho and a 49% stake in Kenya’s Five Forty Aviation in Jul-2012.
The carrier holds ambitions to establish the first pan-African LCC airline by creating a series of fastjet branded airlines throughout the continent under a common sales and service platform. But a series of setbacks including a bitter legal dispute over the ownership of the Fly540 Kenya interest, unexpected delays in gaining rights to operated international services from its Tanzania home base, attempts to enter the South African market and underperforming Fly540 subsidiaries in Ghana and Angola have all conspired in fastjet posting a USD56 million loss for the 18 months to 31-Dec-2012.
Nevertheless, the company remains confident it will succeed. fastjet executive chairman David Lenigas stated: “The next few months will represent a greater transformation for the Company as we endeavour to further implement and grow the fastjet business model. The board is confident it has the right strategy and team in place to build a successful and profitable future for our shareholders”.
West Africa’s aviation industry is being led forward by Nigeria and Ghana. In Nigeria, the largest carrier, Arik Air, recently revealed itself as Boeing’s un-named B747-8 customer, while national carrier Air Nigeria is in the process of re-establishing its long-haul network. While the airlines are not without their problems, the market is growing and new entrants are appearing. In Ghana, the country is opening up to international carriers who are eager to increase their frequencies to the gold-producing country. Ghana itself is the site of one of Africa’s newest carrier, Starbow Airlines, and an impending base for pan-African LCC, Fly540.
Airbus predicted cities in these two countries, Accra and Lagos, will become “airline megacities” in the next 20 years, meaning they will handle 10,000 or more long-haul passengers a day. Accra and Lagos are two of just six** African cities tipped to become an “airline megacity”.