New budget African airline on the cards

14 Jun 2012 - by The Editor

Lonrho Plc has announced the sale of its aviation business to British investment firm, Rubicon.

The sale will allow the group to create Africa-focused low-cost airline FastJet, with easyJet founder, Stelios Haji-Ioannou's easyGroup. It will list its aviation division on the London Stock Exchange (AIM).

In a statement, the group said it had sold the unit to Rubicon for $85.7m and, as part of the transaction, Stelios's easyGroup would own 5% of Rubicon.

“Following completion Rubicon will pursue a strategy of developing a low-cost African airline utilising the Lonrho Aviation route network and existing platforms. Under a licensing agreement with easyGroup, the airline will be branded FastJet and will use modern jet aircraft and operate to European standards,” said a statement by Lonrho Plc.

Earlier this year, Lonrho's four-year programme of developing operational hubs in East, West and South West Africa for Lonrho Aviation was completed. Lonrho Aviation's strategic hubs currently operate in Kenya, Tanzania, Ghana and Angola, providing an unparalleled route network and operating platform to launch across Africa.

David Lenigas, Executive Chairman of Lonrho, commented: "Lonrho has completed its investment programme into its aviation division and has successfully created a unique aviation network in Africa. The next step in the growth of the business requires a world-class aviation team to develop the business to meet the growing demand for a scheduled regional airline in Africa.”

Lenigas said he was delighted that Sir Stelios Haji-Ioannou and easyGroup studied this market and concluded that the Lonrho aviation division provided a unique entry platform for the development of a true low-cost carrier for Africa, to be branded FastJet.

“The combination of Lonrho's experience in Africa; the aviation experience of Sir Stelios Haji-Ioannou and easyGroup; the route network and operations already established by Lonrho Aviation across Africa and Rubicon's cash resources, will enable Fastjet to quickly develop its low cost airline,” Lenigas concluded.