Flight of fancy or fishing for a fortune?
Fastjet boss hopes to crack long-haul routes with cheaper fares
Baggage carousels carrying buckets of water with fish sloshing around in them are not things the boss of British airways owner Iag, Willie Walsh, or easyJet’s Carolyn McCall have had to confront.
But for ed Winter, fish buckets are merely one of the new experiences the airline veteran has had to embrace while running african budget airline Fastjet.
The airline’s Tanzanian operation offers flights to and from Mwanza in the northwest. It is on Lake Victoria and a hub of the fishing industry in the east african country.
He explains: ‘going to Mwanza and coming back with a bucket of fish is like going to the seaside here and buying a stick of rock. It is just what you do.’
Fastjet has now carried more than 40,000 pails of fish. It charges up to £10 – around $15 – a bucket or $6 if you pre-book. Winter says: ‘There are special containers to store the fish. We can set up charges for various baggage requests – we adapt.’
accommodating fish buckets, however, has been the least of Fastjet’s worries since it was created i n 2012. The company is now listed on London’s alternative Investment Market.
easyJet founder Sir Stelios Haji-Ioannou backed the business and it was formed out of a subsidiary of conglomerate Lonrho. aIM market personality David Lenigas – he of the recent gatwick gusher fame – was behind the idea while he was at Lonrho. Lenigas’ trick is to spot a small company, expand it, shout about it then hand it over to experts in the sector and quit for another aIM tiddler.
Fastjet was over-ambitious at the start and has been much slower actually to get off the ground than it first claimed. The shares have never soared to the great altitudes which had been forecast and they’ve been further compromised by a number of capital raising exercises.
Winter got involved in 2011 after getting a phonecall from Stelios.
He knows the billionaire well: the two worked together at easyJet when Winter was consulting on its takeover of go! – where he was chief operating officer – and he later worked for him at his easygroup.
Stelios is described by some as a difficult man to work with – he has been a thorn in the side of McCall as an outspoken shareholder. But Winter was clearly happy because he came out of retirement to take the job at Fastjet where Stelios is still a 10pc shareholder.
He is based out in its office in gatwick but spends half his time in africa ‘usually with the local manager’, he says.
He adds: ‘Tanzania is up and running, so now my time i s split between Zambia, Zimbabwe and South africa, and also seeing invest ors – and, of course, ci vi l servants.’
The airline now flies domestic routes from Dar es Salaam in Tanzania and international flights to Zambia, Zimbabwe and Uganda. There are opportunities in Kenya and Winter says that eventually west africa will be a great place to expand.
Fastjet benefits from international passengers coming into Dar es Salaam from the Middle east and is in the final stages of agreeing a deal with Dubai-based emirates to offer passengers flights from Dar es Salaam.
as well as travelling with fish, operating in africa has certain differences compared with europe which Winter and his team have had to embrace.
The manner of paying is also far removed from european or american methods. ‘a lot of people don’t have a bank account,’ he explains, ‘and they are wary cards. But many people have a mobile.’ So, now more than 30pc of revenues are through mobile money systems. But it isn’t all about Fastjet adjusting to how business is done in africa.
WHen the airline first launched, customers would regularly turn up an hour before a flight with a bag of cash expecting to get on.
He says: ‘People were worried the flight would be cancelled so they didn’t trust to book in advance. now people are booking early.’
Customers have also learnt to change their behaviour if they want to make sure they get on the plane. ‘The first week was difficult,’ Winter says, ‘getting people to be on time.’ He says they were used to many carriers arriving and taking off late. But Fastjet prides itself on punctuality and Winter says: ‘now people know they have to be here on time.’
Winter likes to reel off the stats on just how big the market for flights in africa could be. He says the continent has 15pc of the global population, 20pc of the land mass and only 3pc of the aviation market.
There are 1.1bn people in africa but more than a third of Fastjet’s customers are first-time flyers. africans are used to taking a bus for miles across country on poor and dangerous roads. But as the continent gets wealthier and flying becomes more accessible, they are ditching africa’s limited road network for the air.
December was a significant month for the firm when it hit 1m seats sold and it was its first profitable trading month.
It has finally managed to extricate itself from legacy operations in ghana, angola and Kenya and at the moment the plan is to concentrate on Tanzania where it launched its first flight in november 2012.
NexT on the list for Winter are the planes themselves. This year Fastjet raised £50m to buy new planes and he wants to have 34 in four years. at present, the fleet comprises three leased planes although there will shortly be a fourth.
He says buying planes that are around 10 years old is a ‘good time to take over’ craft – it is affordable but still has plenty of life – and he is looking to buy a batch of airbus a319s aircraft. Fastjet is starting to deliver on its promises to investors. analysts at Liberum issued a buy note this summer and said: ‘Fastjet has achieved proof of concept after successfully starting operations in Tanzania.’
analysts expect the group could finally become profitable next year – which means even more buckets of fish.