fastjet (AIM:FJET), Africa’s low-cost airline, has told DirectorsTalk that it has entered into a binding sale agreement with Avtrade Limited, of its sole owned Airbus A319 (Manufacturer’s Serial number 2891). The consideration is being satisfied in cash for USD8.0 million with a 10% deposit payable on signature of the agreement and the balance on delivery. The agreement is subject to industry standard conditions precedent. Included in the agreement is an option to continue to operate the aircraft from Oct 3 to Oct 17 2016 with a reduction in proceeds of $200,000 for a usage of up to 100 cycles. The use of proceeds will be utilised as working capital for the implementation of fastjet’s Stabilisation Plan as outlined in the Company’s interim results announcement.
As previously announced, fastjet is reducing the size of its fleet and is transitioning its fleet from the existing A319 aircraft to smaller aircraft, a move which is expected to yield an approximately 15% cost reduction for fuel, maintenance, handling and navigation charges. The transition from the existing aircraft to the replacement fleet will initially be arranged through short term wet leases (aircraft, crew, maintenance and insurance). It is intended that the wet lease arrangements will be superseded by dry leases (aircraft only) in H1 2017.
Nico Bezuidenhout, Chief Executive Officer, commented: “The sale of our Airbus A319 is an important step in our Stabilisation Plan and our move towards a more appropriate size of fleet. It’s early days but the Plan is progressing well and the money raised from this sale will be used to drive its continued implementation.”
