African Budget Carrier Fastjet Suspends Flights, Warns on Funds
Low-cost carrier Fastjet Plc said it's suspending commercial flights in South Africa and Zimbabwe due to the pandemic, jeopardizing negotiations to raise emergency funds through a disposal.
The shares skidded after Fastjet said talks to sell a stake in its Zimbabwe operation are on hold until it's clear how long extended lockdowns will last. An investor group including Solenta Aviation Holdings Ltd. and Zimbabwean investors has expressed interest, Fastjet reiterated in a release on Friday.
Fastjet, the first discount airline spanning sub-Saharan Africa, is in a precarious situation with just enough funds to survive until the end of August. If flights haven't reached “sustainable levels” by the start of September, Fastjet said won't be able to keep operating without support from Zimbabwe's central bank.
Cash reserves at the end of June stood at $1 million.
For now, Fastjet will operate about three repatriation flights per month from South Africa to Zimbabwe. A fuller service will resume once governments in the two countries give the all clear, it said.
Shares of Fastjet traded 13% lower as of 8:08 a.m. in London, after dropping as much as 22%. The company has a market value of 5.3 million pounds ($6.6 million).
©2020 Bloomberg L.P.
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