LONDON–Shares in Fastjet PLC (FJET.LN) recovered to climb strongly a day after its stock dropped sharply on a revenue warning, as the pan Africa low-cost airline Wednesday announced that the Kenyan government has cleared it to operate flights between Tanzania and Kenya.
Fastjet is expanding its routes across Africa to take advantage of the continent’s rising population and thirst for air travel, even as the region remains constrained by low wages and poor transport infrastructure.
“Nairobi and Dar es Salaam are not only key travel destinations, and two of the busiest airports in the region [by number of passengers], but also hubs with extensive regional and international networks. Expanding the network into Kenya marks an important milestone in Fastjet’s strategic development,” said Mr. Winter.
On Tuesday, Fastjet saw its shares fall after it warned of lower-than-anticipated revenue in 2015 and 2016 due to challenging market conditions and currency headwinds.
In particular, the company said the prolonged adverse effect of the presidential election in Tanzania led to reduced governmental and civil service traffic and lower demand for travel more widely across the country.
Still, Fastjet believes 2016 will be a year of network growth and that it will be cash flow positive for the next financial year.
Founded in 2012, the company’s goal is to build a fleet of up to 34 aircraft flying to 40 destinations by the end of 2018.
At 0834 GMT, shares rose 13% to 49.5 pence, valuing the company at 29 million pounds ($43 million).
Source; Market watch
