The airline, which wants to become the first pan-African low-cost carrier, has never been profitable and last raised funds via a £15 million share offering in the summer.
Now it says that “additional costs associated with delivering the stabilization plan, in particular the cost and terms associated with returning leased aircraft being more onerous than previously expected, has placed greater strain on available cash-resources”.
Those plans includes downsizing from A319 aircraft to wet-leased E190s, the first of which was introduced in October, in a bid to save up to 15% in operating costs.
Three of the A319s to be ditched were added only 18 months ago on the back of a £75 million fundraising, so one wonders why on earth investors would be tempted back to such a haphazard enterprise.
In December the airline will cut flights between Johannesburg and Victoria Falls, Zimbabwe, and reduce frequencies from Tanzania to Kenya, Uganda and Zimbabwe.
Fastjet is also partway through a long-overdue shift of its head office from near London to Africa, although it says the move to Johannesburg will only be “substantially completed” by March 2017.
Another significant development has been the resignation of chairman Colin Child, who had faced sustained criticism from Easygroup, one of London-listed Fastjet’s main shareholders.
“Having led the fundraising exercise in July this year Colin believes that it would not be appropriate for him to continue in this role given the company is initiating, sooner than originally expected, a further fundraising exercise,” said the company in a statement.
Grasping for positives amid the mess, Fastjet CEO Nico Bezuidenhout – who previously ran successful South African LCC Mango – outlined plans for Fastjet to break even by the end of next year, and re-stated his confidence in “the tremendous market opportunity there is for a truly pan-African LCC”.
That there may be, but it’s hard to imagine Fastjet as the airline to realize it.