12th Jan 2015 08:20
LONDON (Alliance News) - Fastjet PLC saw its shares rise early Monday after it said it had made its first profit before interest and tax in December, as revenue and passenger yield soared due to strong demand over the holiday season and its fuel costs fell.
In a statement, the African low-cost airline said yield per passenger was up 20% on the year in December and total revenue more than doubled. Its Tanzanian operations carried 65,653 passengers in the month, up 75% on the year, while load factor, a measure of how full its planes are, rose two percentage points to 76%.
"The contribution generated by the Tanzanian operation was sufficient to create an underlying operating profit for the month at the fastjet PLC group level," it said.
The airline was also bullish about its prospects.
"Although the first quarter is traditionally a relatively low demand flying period, trading in the first quarter is expected to be much improved on last year as the excellent growth trends in both passenger numbers and yields seen in 2014 are anticipated to continue and as the company benefits from lower fuel costs. The number of flights operating has been reduced to match capacity to expected demand and reduce costs," it said.
Fastjet said its fuel price in January will be 13% down on December, and it expects the price to fall further in February and March thanks to the recent fall in oil prices feeding through to African aviation fuel supplies. The company's doesn't hedge any of its fuel requirements, and will therefore benefit from the full impact of the price fall.
"The announcement of our first profitable trading month is a great achievement and a huge milestone on the road to becoming the first pan-African low-cost airline. We have already proven that the low-cost model works to stimulate traffic and we have now shown that it can create a profitable business. The Tanzanian fleet of three aircraft is now producing more than double the monthly revenue compared to a year ago. This higher utilisation, combined with higher per passenger revenues and lower fuel prices, has been transformational for the business," interim Chairman Ed Winter said in the statement.
Fastjet shares were up 22.2% at 1.10 pence early Monday, making it one of the best-performing stocks on the AIM All-Share index on the day.
By Steve McGrath; [email protected]; @stevemcgrath1
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
FJET.L