Stelios Haji-Ioannou, has bought Lonrho’s African aviation business in a move that signifies the British-born billionaire’s push towards establishing a new Africa-focused airline.
Industrial group Lornho, which has interests in Africa, confirmed the sale of its aviation unit to British investment firm Rubicon for $86 million in Rubicon shares, Reuters reported.
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. However, this is subject to the approval of shareholders who will meet on June 29 to approve the deal.
Fastjet will use the existing Fly540 platform and expand its network, eventually folding it into the new airline.
Commenting on the development, Ed Winter, former easyJet chief operating officer who will become Fastjet CEO, said it is the prime time to launch Fastjet services as Africa is the last aviation frontier.
“We will fly between Kenya, Tanzania, Ghana and Angola and the average fare will be $70-$80. We should be flying by the end of the year,” he said, adding that Fastjet would expand across Africa to become the first low-cost pan-African airline.
According to reports, Fastjet will launch with up to three jets in its operations, bringing European standards to the African market.
Africa’s aviation market, which has been riddled by poor regulations and substandard operations, with recent crashes in Ghana and Nigeria, seems set to soar as the continent emerging economies, investment potential and burgeoning consumer market constantly drive business and leisure travel.
Earlier this year, self-styled serial entrepreneur 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 set up low-cost British airline easyJet in 1995 when he was 28. He retains the right to be appointed to the Rubicon board as an easyGroup representative.
EasyGroup conducted a feasibility study for Rubicon, which last year raised £9 million ($14 million) in a placing to fund Fastjet’s launch.
Since launching EasyJet, Stelios has gone on to start a range of ventures including easyHotel, easyCar, easyBus and many more.
Fastjet’s Africa-focused airline is set to bring about competition in the African aviation market, which has long been dominated by state-owned airlines.