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Fastjet back on track as company buys brand; approaches stability rapidly

by Agencies
04 Jul 2017 at 06:43hrs | Views
Johannesburg - African low-cost airline fastjet announced around its AGM last week that it has acquired all intellectual property rights associated with the fastjet brand from the easyGroup with effect 29 June 2017. Prior to that, the airline licensed the mark from the easyGroup and Sir Stelios Haji-Ioannou who established the brand in 2012, and founded easyJet in 1995. Fastjet has paid a cash consideration of GBP 2.5 million for the brand, but it represents significant savings in royalties that will be amortized over the next 5 years.  
 
"fastjet is a great brand in all its African markets, making it a highly valuable asset for the company," says founder and shareholder Sir Stelios Haji-Ioannou. "I have accepted the view of the current board that the company should own its own brand rather than licence it from me.  I feel we have agreed a fair price for its transfer - $2.5m – which is less than what the company would have had to pay over the next five years. I still hold shares worth about £1.3m in the company and as such I will be a supportive shareholder, hoping to realise significant upside potential as fastjet grows and prospers. From the decisive actions thus far taken by the new Management and Board, and early indicative outcomes, I am encouraged that fastjet's direction of travel is now on the right course"
 
Last week fastjet was recognized as Best African Low-Cost Airline by the Skytrax World Airline Awards at the Paris Air Show. Says Nico Bezuidenhout, chief executive of fastjet "Brand development is an integral part of building a successful consumer facing business and represents a substantial investment for any airline - it logically follows that your brand, an asset to be leveraged for the benefit of Shareholders, should be under your full control and ownership.  We are happy to have reached agreement with Sir Stelios and appreciate the ongoing confidence he has expressed in the fastjet business and leadership team."
 
The Company has made steady progress in implementing stabilisation efforts, including inter alia, a re-fleeting process, relocation of its headquarters from London to Johannesburg and a right-sizing of its operations in Zimbabwe and Tanzania.  These steps are having the desired effect and accordingly fastjet aims to achieve a cashflow break-even position for the final quarter of 2017.  The Company, aiming to leverage its relationship with Solenta Aviation Holdings, a strategic investor who acquired a shareholding in fastjet in January 2017 and who has an operational footprint in many African countries, is in the process of evaluating expansion options to further geographies and looks forward to making further announcements in due course.   
 
Fastjet presently operates in 4 African markets, namely Tanzania, Zimbabwe, Zambia and South Africa and has recently bulked up frequencies between Johannesburg and Harare as well as Harare and Victoria Falls. "We are investigating several opportunities across the continent and plan to develop new markets and network points through prudent growth underpinned by sound commercial principles," says Bezuidenhout.

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Source - Agencies

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