Airline moves to quash cash crisis reports

Fly540 flight attendants. In a statement on Wednesday, Five Forty Aviation, which owns the Fly540 brand, said that FastJet subsidiaries across the region must repaint their aircraft and remove branded merchandise from sales offices after failing to comply with conditions stipulated in the licence agreement.

Low cost airline Fastjet has denied that it is facing financial trouble days after moving to establish a partnership with a grounded local carrier, Jetlink.

In an interview with the UK-based Daily Telegraph newspaper, a FastJet spokesperson said the company had carried 30,000 passengers in its first month of operation.

Fastjet started flights with Airbus 319s from Dar es Salaam in Tanzania at the end of November.

“Press concerns over infrastructure have proved unfounded, with no scheduled Fastjet flights cancelled and 99.6 per cent arriving within 15 minutes of schedule,” said Mr Ed Winter, FastJet’s chief executive on a separate occasion.

The firm is currently facing lawsuits from its Kenyan subsidiary, Fly540 Kenya, over debts of about Sh591.6 million ($6.8 million).

Media reports have also indicated that the company has an outstanding tax bill of about Ksh174 million ($2 million) to the government of Tanzania.

According to the UK-listed company’s spokesman, the issue in dispute “is a legacy issue inherited from the Fly540 operation.”

“With a company like ours operating in markets such as these, from time to time issues like these will arise,” he said.

Fastjet was set up last year following a transaction in which Lonrho Aviation transferred its 49 per cent stake in Fly540 to Aim-listed company Rubicon.

FastJet, which is modelled on Europe’s EasyJet, was to revamp the Fly540 business in the region and eventually rebrand the airline in Kenya.

Never completed

However, Fly540 now claims that the transaction was never completed, partly due to the Sh591 million debt.

FastJet has since sought an alternative entry into the Kenyan market, signing a memorandum of understanding with Jetlink to set up a new low-cost airline in Kenya.

Jetlink, which was launched in 2004 and has traffic rights to all domestic destinations in Kenya, as well as a number of regional destinations, temporarily suspended operations in November 2012, pending restructuring.