EasyJet founder Stelios Haji-Ioannou moved a step closer to setting up a new Africa-focused airline, Fastjet, after a British investment group he is part of bought Lonrho’s African aviation business.
Lonrho, an industrial group with interests in Africa, said on Wednesday it had sold its aviation unit to British investment firm Rubicon for USD$86 million in Rubicon shares. As part of the deal, Stelios’s easyGroup will own 5 percent of Rubicon.
Lonrho, which will own more than 50 percent of Rubicon on completion of the deal, runs Fly540, a low-cost carrier that operates in east Africa.
Fastjet, which plans to list on London’s junior AIM market under the Rubicon banner, will use the existing Fly540 platform and expand its network, eventually folding it into the new airline.
“It is the optimum time to launch because Africa is hugely underserved from an aviation perspective. It is the last frontier for aviation,” said Ed Winter, the former easyJet chief operating officer who will become Fastjet CEO.
“We will fly between Kenya, Tanzania, Ghana and Angola and the average fare will be USD$70-$80. We should be flying by the end of the year,” he said, adding Fastjet would expand across Africa to become the first low-cost pan-African airline.
Africa’s aviation market is set to soar, powered by the resource-rich continent’s robust economic growth and burgeoning consumer market, which are driving business and leisure travel.
Earlier this year, Stelios unveiled plans to set up Fastjet, stoking tensions with easyJet management – Stelios and his family are the largest easyJet shareholder with 38 percent.
Stelios, who set up low-cost easyJet in 1995 when he was 28, retains the right to be appointed to the Rubicon board as an easyGroup representative.
Fastjet will launch with up to three jets and plans to operate to European standards, Winter said.
Rubicon shareholders will meet on June 29 to approve the deal.
EasyGroup conducted a feasibility study for Rubicon, which last year raised GBP£9 million (USD$14 million) in a placing to fund Fastjet’s launch.