South Africa-based ACMI/charter specialist, Solenta Aviation Group, has increased its stake in fastjet plc ahead of the low-cost airline's push into the South African and Mozambican markets.

fastjet said in an LSE disclosure last week that in order to support its growth initiatives, it had held an accelerated book build and a subscription which raised gross cash proceeds of not less than USD44 million. Aside from existing major shareholders such as easyGroup Holdings, support came from Solenta Aviation Group which increased its stake in the firm from 28% to 29.9%.

It is recalled that as part of the original buy-in deal between fastjet and Solenta announced this year, fastjet will be able to deploy Solenta aircraft on any one of Solenta's AOCs on the African continent under the fastjet brand in exchange for a cost contribution/revenue share, depending on use.

As such, fastjet has confirmed it will enter the Mozambican market through Solenta Aviation Mozambique (FW, Maputo) which, as recently reported, was granted scheduled domestic passenger route authorities covering Maputo to each of Beira, Tete, Nampula, and Lichinga. Operations are expected to commence later this month.

In tandem to the Mozambican market, fastjet will also make its South African market debut under a branding agreement with Federal Air (7V, Durban Virginia). fastjet had originally planned to enter the South African market back in 2013 via a partnership with Blockbuster, a South African investment firm associated with a number of high-profile South Africans including Edward Zuma and Yusuf Kajee. Back then, Federal Air was to have been used as the capacity provider. The Fastjet South Africa (Johannesburg O.R. Tambo) project, however, was put onto the backburner after Fastjet (Dar es Salaam), Fastjet's Tanzanian mother unit, was granted international traffic rights. As such, fastjet's South African operations are expected to start in either 4Q17 or 1Q18 and will cover FedAir's existing network of ten domestic destinations.

"..its established network comprising 10 tourism and business destinations provides a viable South African market brand entry for fastjet and a platform from which to grow through adding more destinations within this country," fastjet said.

Entry into the Mozambican and South African markets will be undertaken by a trio of ATR72-600s - fastjet's maiden turboprop aircraft - which will be secured on ten-year contracts. The firm said it had signed a letter of intent with ACIA, a member of the ACIA Aero Capital group, for the aircraft which are due to be deployed over the next six months in South Africa, Tanzania, Mozambique, and possibly Zimbabwe.

"With the expansion into the new markets, these aircraft will assist fastjet in equipping itself with the appropriate aircraft capacity," it said. "The 70 seater ATR planes, which are turboprops, accommodate shorter runways and deliver better fuel efficiency and per seat passenger costs, on sub 1-hour route flights."

fastjet currently operates across two AOCs - Fastjet in Tanzania and Fastjet Zimbabwe (FN, Harare International). Despite earlier profitability concerns, fastjet said its core operations in Tanzania, accounting for about 80% of its turnover, has now achieved monthly profitability pre inter-company cost, whilst the relatively newer operation in Zimbabwe achieved its first cash-flow-positive month in August 2017.

Other measures that have been implemeneted and which are aimed at streamlining fastjet's operations include the removal of all expatriate staff as well as the closure of its London Gatwick head-office. The firm's board has also decided that it intends to evaluate a dual listing on the AltX Market of the Johannesburg Stock Exchange in the next twelve months.