Fastjet opens talks to acquire grounded South African airline

Budget carrier Fastjet is set to make its first acquisition in Africa following talks to buy South African low-cost airline 1Time, which withdrew flights to Kenya in September.

Fastjet, which started operations in Tanzania last Thursday and is trading in Kenya as Fly540, said it would pay an undisclosed fee to 1Time Airline and reach a settlement with the carrier’s creditors.

READ: FastJet eyes acquisitions and targets Kenya operation next year

The airline stopped flights between Johannesburg and Mombasa in a drive that saw it terminate non-profitable routes and apply for a business rescue— a process of appointing an expert to turn around an enterprise while protecting its assets from creditors who it owed R320 million (Sh3.2 billion) in short-term debt.

The deal will offer Fastjet flight licenses, mainly in South Africa, that will speed up its ambition of becoming a low-cost Pan Africa carrier.

“The acquisition of 1time would be a complementary strategic fit for Fastjet’s growth into a pan African low-cost carrier and the synergies with Fastjet would potentially increase the number of available route networks from South Africa into the rest of Africa,” said Mr Ed Winter, the airlines’ CEO, in a statement.

Plans dashed

“1Time would be rebranded into the Fastjet brand. We would hope to get 1time flying again in time for the Christmas holiday period, when many customers have had their plans dashed by the cessation of 1Time service.”

The airline catered mainly for leisure tourists visiting Kenya’s coast, leaving the lucrative business route between Nairobi and Johannesburg to Kenya Airways and South African Airlines.

READ: FastJet shifts focus to East Africa market with Nairobi hub

Besides Southern Africa, it launched flights to Livingstone in Zambia and Zanzibar in Tanzania, both leisure travel routes.

The deal comes less than a week after Mr Winter told the Financial Times that they were keen on buying struggling African airlines as an easier route to grow market share on the continent.

Fastjet expects to keep fares on East African routes at between Sh6,000 and Sh6, 700, with passengers paying for extras like food and luggage. On June 13, Lonrho transferred its 49 per cent stake in Fly540 to Rubicon in a deal worth Sh7.2 billion.

The new owners are revamping Fly540 and remodelling its business into a low-cost African airline.

Africa’s aviation market is set to soar, powered by the resource-rich continent’s robust economic growth and burgeoning consumer market, which are driving business and leisure travel.