FastJet is considering expanding in South Africa as new chief executive Nico Bezuidenhout evaluates growth opportunities for the unprofitable discount airline. He says the country is too big to stay out of.
While the Africa-focused carrier already connects Johannesburg with its hubs in Tanzania and Zimbabwe, it has no internal services in South Africa.
The market cannot be ignored, Bezuidenhout said in Johannesburg, where he is moving Fastjet’s headquarters from London after joining the company in August.
Bezuidenhout is starting to identify growth opportunities after beginning a fleet over hauland cutting weaker routes to reduce costs and stem losses at Fastjet, which he expects will break even at a cash-flow level from the fourth quarter next year.
The carrier has not made an annual profit since it was started in 2012.
Bezuidenhout previously ran budget carrier Mango Airlines for 10 years and had spells as head of SA Airways.
He would like to make progress in South Africa next year, although Fastjet would have to comply with regulations capping foreign ownership of airlines in South Africa at 25%.
The company is owned by institutional shareholders and Easy group, the investment vehicle of EasyJet founder Stelios Haji-Ioannou, according to data compiled by Bloomberg.
“The South African aviation market is reasonably overtraded,” Bezuidenhout said.
“When one enters this market, you have to do it carefully and in a considered and measured manner.”
Fastjet is also evaluating expansion in other markets in Southern Africa, although Bezuidenhout said it would resist deploying excess capacity by adding routes too quickly, calling it the quickest way that you drive an airline into the ground.