Aviation industry players are sceptical about Fastjet’s attempts to resuscitate 1time, particularly as the airline would have to comply with SA law in that “the applicant is not a natural person, is incorporated in the Republic and at least 75 per cent of the voting rights in respect of such person is held by residents of the Republic.” (16.4 of the Air Services Licencing Act No.115 of 1990).
After having pulled out of last-minute negotiations to save 1time last month, Fastjet has now resurfaced and is in talks to buy the failed budget airline from its liquidators for a nominal fee. The proposed transaction, which at the time of going to press was not yet concluded, would involve Fastjet reaching a settlement with 1time creditors.
Ed Winter, CE of Fastjet, told Tourism Update that if the transaction went ahead, he hoped to get 1time flying again in time for the Christmas holiday period. He said flights would initially be operated by a number of aircraft from the 1time fleet but restructuring plans would see a rapid re-fleeting with modern Airbus A319 aircraft.
Although 1time would be entirely rebranded into the Fastjet brand and sold through fastjet.com, the airline intends to keep many of the original 1time employees on the payroll. Winter added that Fastjet would operate all domestic routes operated by 1time but would also look at rapid regional expansion.
However, if an airline wants to operate on domestic routes in South Africa, it needs to be a South African operation with an almost entirely South African ownership, notes Chris Zweigenthal, CEO of Aasa. “Fastjet is not a South African airline and it is my understanding that it will operate out of Tanzania.” He says, if operating from Tanzania, the airline will not affect the low-cost domestic market in South Africa but will compete directly on the Tanzania-South Africa market.
According to Allan Moore, outgoing CEO of Barsa, there are still numerous unanswered questions surrounding the renewed negotiations. He says it is a particularly strange move for Fastjet to consider taking over embattled 1time, along with its debts, instead of simply starting an entirely new operation. “It could be a speed issue as it might be quicker for the airline to start operating when it buys 1time,” he says.
When 1time filed for liquidation last month, the court ordered a provisional liquidation and decreed that the return date for the order would be December 11, at which time the court would rule on the final closure of the business. Provisional liquidator, Aviwe Ndyamara, was appointed to look into various options for investment in 1time before the final closure.
Meanwhile, in a statement, Winter lashed out at the current South African LCC market, saying many former 1time customers had had their plans dashed by the cessation of services and the subsequent increases in fares by competitors. Fastjet has announced that it aims to offer customers in Africa the lowest possible fares, in addition to pay-as-you travel extras – similar to easyJet in Europe. The airline currently flies from Mwanza to Dar es Salaam for R175 one-way, excluding taxes.
Moore says if Fastjet is planning to introduce these all-time low fares in South Africa, it could put considerable pressure on the aviation market and potentially drive other South African LCC operators out of business.
Mango and kulula.com declined to comment, saying there were currently not enough facts known about the negotiations to make an educated comment.
Dorine Reinstein
