30th Sep 2013 12:58
LONDON (Alliance News) - Fastjet PLC Monday reported a wider loss for the first half of the year as the costs of ramping up its operations more than offset an increase in revenues, but said its performance will improve in the second half as those expanding operations start to pay.
The low-cost airline operating in Africa reported a net loss of USD41.9 million for the six months to June 30 compared with a loss of USD2.1 million a year earlier, as operating costs jumped to USD64.9 million, from USD2.4 million. Its revenues increased to USD25.5 million, from just USD347,000.
Still, it is trimming its losses sequentially. The loss before interest and tax at its main Tanzanian operations were USD4.2 million in the second quarter compared with USD9.1 million in the first quarter.
"Our performance is expected to considerably improve in the second half of 2013 with yields having grown from US$42 to US $81 between January and June," the company said in an earnings statement. "As our planned network expansion progresses and scale covers fixed operating costs, we fully expect fastjet Tanzania to become profitable."
The airline said that once it become profitable out of Tanzania, it will focus on the South African market next.
Last week it had to delay a new route between Dar es Salaam and Johannesburg because South African authorities wanted more documentation before allowing flights to start. It said it expects to add further international routes over the next few months, including to destinations in Zambia and Malawi, and also a fifth city, Mbeya, to its Tanzanian domestic network from November 1 following completion of the redevelopment of Songwe airport to accommodate modern jet aircraft.
Fastjet shares were down 3.3% at 5.78 pence Monday afternoon.
By Steve McGrath; [email protected]; @SteveMcGrath1
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