African low-fare start-up FastJet has confirmed it has opened negotiations with the former management team and directors of failed South African low-cost carrier 1Time and is working with the provisional administrator of the business in an attempt to get the airline flying again. Under the terms of the arrangement, FastJet, which inaugurated operations in East Africa last week, will acquire outright control of the 1Time Holdings, the parent company of the closed airline for a nominal fee and will work with creditors to clear the ventures debts.
A spokesman for the carrier confirmed to The HUB that although the talks are proceeding in a positive fashion, there is no guarantee that FastJet will decide to proceed with the transaction and even should it decide to conclude the deal, it will still remain subject to final approval from its own Board, representatives of 1Time Holdings and regulatory authorities.
“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 Ed Winter, Chief Executive Officer, FastJet.
“We are working with the South African authorities who, like us, are completely committed to helping the airline industry in South Africa develop for the benefit of all the people. Lower fares mean more economic growth, more jobs and more prosperity and we hope to keep many of the original 1Time staff employed. With the co-operation of the shareholders of 1Time we can build an airline that will provide a real choice to South Africans, based on the great reputation of 1Time and the low-cost experience of FastJet,” he added.
If this transaction goes ahead and the timescales are “extremely challenging,” according to Ed Winter, the plan is to get the South African carrier airborne again in time for the seasonal holiday period. Many South African travellers have had their plans to fly within the country during this period impacted by the cessation of 1Time’s services and the subsequent increases in fares from competitors.
If 1Time returns to the air its flights will likely be initially operated by a number of aircraft from its current grounded fleet of McDonnell Douglas MD-82, MD-83 and MD-87 airliners. In time, restructuring of the business would likely see a rapid re-fleeting with Airbus A319 equipment and the incorporation of the full FastJet brand.
The low-fare carrier inaugurated flights from its base at Dar es Salaam’s Julius Nyerere International Airport on November 29, 2012 with domestic links to Mwanza and Kilimanjaro using its two A319s. On its first day of operation eight sectors were flown, carrying more than 900 paying passengers and achieving an average booked load factor of 78 per cent.
According to the carrier future demand for seats on these two initial routes is currently “far outstripping supply” and additional flights to these destinations “are already being considered”. A third A319 is due to enter service with FastJet this week and this will be used to expand its route network regionally over the coming weeks including international flights to Entebbe, Nairobi, Mombasa and Zanzibar.
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