fastjet Zimbabwe records US$4 million loss

FASTJET Zimbabwe reported a loss of US$4.0 million, with revenue per passenger dropping by 14 percent due to increased competition from more airlines on the Zimbabwe route following the Open Skies Policy.

In its Strategic Report for the year ending December 31, 2023, the airline acknowledged that Zimbabwe remains a challenging and volatile market, necessitating ongoing change management and active daily oversight.

Volatility is mainly caused by the rapid devaluation of the local currency and inflation.

The Open Skies Policy has granted Zimbabwean landing and route rights to foreign airlines that meet relevant international technical and safety standards.

As a result, the number of carriers operating on key routes served by Fastjet Zimbabwe has significantly increased, intensifying competition in an already low-yield market.

“The Group recorded a loss for the year of US$7.7m from continuing operations (from 2022’s US$10.7m profit) and an operating loss of US$6.7m (from 2022’s US$12.1m profit). Fastjet Zimbabwe reported a loss of US$4.0m (2022: US$2.9m profit),” reads part of the report.

It added: “Zimbabwe revenue increased slightly year on year by US$0.9m to US$50.9m (from 2022’s US$50.0m). The increase was not as expected because of the entrance of competition into the market.

“FedAir revenue increased by US$4.4m to US$21.2m (2022: US$16.8m). FedAir managed to go back to its pre-pandemic levels and this was also compounded by the exit of some of its competitors to deliver this strong performance. Central had a loss of US$3.5m (2022:US$10.1m).

“This is mainly because there was other income of US$9.0m in the prior compared to US$3.3m in the current year. This other income was mainly from recovery of legacy debt in Zimbabwe.”

Fastjet Zimbabwe began operations in 2015 with scheduled flights from Harare to domestic destinations in Zimbabwe and later expanded to regional flights to South Africa.-ebsinessweekl