Fastjet has signed a memorandum of understanding (MOU)
with Kenyan airline Jetlink Express, which it says will provide a platform
for launching operations in the east African country this year.
The announcement comes within hours of
news that Fastjet subsidiary Fly540 has commenced legal action over the
repayment of $6.78 million in debt - a move that had threatened to
postpone the launch of Fastjet's planned base in Nairobi, Kenya.
"Under the
terms of the MOU, Fastjet and Jetlink are working together to create a joint
venture which will give a platform for the launch of the Fastjet brand in
Kenya," the low-cost startup says.
Chief executive Ed
Winter adds that the joint venture could see Fastjet aircraft enter the Kenyan
market "within the next few months".
Jetlink suspended operations in
November 2012 after encountering funding difficulties in South Sudan. The
Nairobi-based carrier has a fleet of seven Bombardier CRJ100s
and CRJ200s plus oneFokker F28, according to Flightglobal's
Ascend Online database.
It operated
services to the Kenyan cities of Mombasa, Kisumu, Eldoret and Wajir, as well
flying to Juba in South Sudan, and Mogadishu in Somalia.
"We believe
the partnership will be mutually beneficial and will go a long way in meeting
the current demand for capacity on Kenya's domestic and regional routes,"
says Jetlink chief executive Elly Aluvale.
News of the
partnership came on the same day that Fastjet responded to legal action by
subsidiary Fly540 over the latter's underwriting of $6.78 million
in outstanding debt.
Fly540 chief
executive Don Smith commenced legal proceedings after writing to Fastjet parent
Lonrho on 9 January. "The debt relates primarily to the financial support
given to Fly540 Tanzania, as well as branches in Angola, Ghana and elsewhere
operated by Lonrho Aviation," says Fly540.
"Under the
acquisition agreement, Lonrho Aviation - now Fastjet - agreed to pay off
this bank debt. To date, they have not done so. This money is not owed to any
individual or executive of Five Forty Aviation."
Fastjet dismissed
the legal challenge by saying its acquisition of Fly540 has been "fully
consummated" and that no further payments are outstanding.
"Mr Smith
certified in a document signed by him on 24 July 2012 that - other than
specified liabilities as set out in the document - there is no other liability
or indebtedness due to him or any entity controlled by him," says Fastjet.
The legal action
had threatened to disrupt Fastjet's establishment of a second base in Nairobi,
Kenya - originally planned for the first quarter of 2013.
Speaking to
Flightglobal before the Jetlink MOU was announced, operations director Rob
Bishton confirmed that Fastjet was seeking "clarity" over unspecified
"obstacles" in the Kenyan market.
"We're not
going to be beholden to it [the Nairobi base] in terms of the business model
for this year," he said. "But it is an important piece of the puzzle
for us long-term, so when we do see movement that we're confident is clear and
transparent then we will move quickly.
"We'll only
go in there when we're confident that we've got good sight of all the
obstacles."
Fastjet launched operations in November
2012 in Dar es Salaam, Tanzania, serving two domestic routes with a fleet of
three Airbus A319s.
The Stelios
Haji-Ioannou-backed carrier acquired Fly540 in a reverse takeover in June 2012.
It had planned to take over the subsidiary's four air operator's certificates
in Tanzania, Kenya, Ghana and Angola. Fly540 has already ceased operations in
Tanzania.
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