In the African fast line with Fastjet analysis

Fastjet PLC Analysis

FastJet Plc was formerly known as Rubicon Diversified Investments. The Company changed its name after it announced its intention of adopting a new investing policy in 2011.  The aim of the company is to seek an acquisition in the global aviation services sector focusing mainly in the Africa regions. Fastjet PLC is the leading company for the African airline Fly540, which operates in four countries based in Ghana, Kenya, Tanzania, and Angola (Moores, 2009). The Company acquired Lonrho Aviation in 2012 as an African airline which operated under Fly540 brand owned by Lonrho Plc. The Fly540 has about 10 aircraft, which serves around 25 domestic and regional destinations, carrying around 750,000 passengers per year (Jones, 2004).

In Tanzania, the fastjet flies from 5 international airports, covering the routes between Kilimanjaro, Dar-es-Salaam, Mwanza, Mbeya and Zanzibar along with many more others across the East Africa to come.  The Fly540 also fly internationally between Dar-es-Salaam and Johannesburg, South Africa. Research shows that the Company in 13 June 012, the compay entered into an acquisition agreement so as to acquire the issued share capital of the Lonrho Aviation and on 29 June the same year, the Company managed to pass the resolutions, approving Lonrho Aviation acquisition as well as, the acquisition of  the economic interest in Fly540 Kenya.

The high percentage of first time flyers on the Company’s’ initial routes demonstrates that the Company offers quality product as well as, operates in environment which is highly competitive market environment in which it operates. For instance, a steady increase had been noted in the company’s average yield, as a result, they continue to offer low cost particularly for fare to ensure that the Company stimulates the market interest (Jones, 2004). Since the launch of the Company, FastJet Plc as well managed to build significant brand equity with the African Brey Parrot, which was also well-known across the continent. However, research shows that the brand awareness has had a dramatic effect on cost per acquisition (CPA) in countries like Tanzania; this has forced the company to continue managing their marketing expenditure down, which is in line with their increasing brand reach. Generally, the wider reaction of the FastJet Plc Company’s’ brand strategy resulted in various prestigious awards (Moores, 2009).

In addition, the Company has also embraced its strongest possible channel mix that helps it in reaching the clients in the market. For example, the Company dominated social media aviation environments such as Facebook and Twitter in Africa. This has enabled FastJet to be a sub Saharan Africa’s most liked Airline (Jones, 2004). The use of social media in the company eased communication with the company’s customer base, hence reduced further marketing expenditure. The new and innovative payment methods which include the payment of seats through mobile phone accounts such as M-PESA as well as, Tigo also played a significant role in the Company. These led to low internet penetration along with credit card usage figures across Africa.

In spite of all these success, the research suggests that the Company on the other hand, faces market conditions in that, they have been working with airlines which fly into Africa, but they find difficulties in finding suitable partners who could help them in transporting their clients or passengers intra-country. The problem has forced the Company to sign distribution deals with other large operators to help solving the issue (Jones, 2004).

The data provided by the Chief Executive of the FastJet Plc reported that the Fly540 operations for many months have not performed to the Company’s expectations and as a result, the Company has managed to make impairment to goodwill and to investments that will help in solving the issue or problem. The Company’s future strategic plan is to create a pan-African low cost airline brand. The strategy will therefore aims in creating more airlines, and all are to operate under the fastjet brand as well as, meeting identical international standards of safety, customer service and reliability. Research also shows that the Company for many years has been encountering many issues such as delays; as a result, the company has managed to put up a strong management that would help in pursuing a policy of creating shareholding structure in each airline that will allow greater local investment. Based on the experience the Company has in regards to airline, the Company still believes that they have a great confidence which will help them in fulfilling their future strategy of becoming the Pan African Low Cost Airline of choice (Moores, 2009).

 

Conclusion

The aim of the fastjet company is to ensure that they become the global aviation services sector focusing in the Africa regions. From the Company’s outlook, it is believed that the next few months will represent a greater transformation to the Company since the company endeavor to further implement as well as, to grow the fastjet business model. The confidence in the Board members is a surety that the Company will be capable of building a successful and a profitable future for its shareholders.

References

Jones, G. (2004). In the African fast line with Fastjet. New York: Paulist Press.

Moores, V. (2009). Brave beginnings: African startup FastJet plans for success in a market where many fail. London: Paulist Press.


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