Low-cost airline Fastjet has signed an option agreement to purchase shares in provisionally liquidated South African airline 1time, confirming the London-listed carrier’s ambitions to operate flights across the African continent.

Ventures Africa reported earlier this month that Fastjet was in negotiations over acquiring 1time for a nominal fee and now, subject to the necessary approvals, the company is to buy all shares in 1time for ZAR1.

Initial promises that the airline would commence operations in South Africa before Christmas have, however, proved optimistic, with Fastjet CEO Ed Winter confirming operations are now set to begin early next year.

Winter said the acquisition “supports Fastjet’s growth into a pan African low-cost carrier” and would increase the number of route networks connecting South Africa with the rest of the continent.

“With the co-operation of the shareholders of 1time, we can build an airline that will provide a real choice to South Africans, based on the great reputation of 1time and the low-cost experience of Fastjet,” he said.

The deal is awaiting the necessary approvals, according to Business Day, but should they be granted the re-branded 1time will serve major South African cities such as Johannesburg, Cape Town, Durban, Port Elizabeth and East London.

1time liquidator Hannes Muller said creditors of the airline, who are owed around R462m, still needed to sanction the agreement if the deal were to head to court for final approval. The deal must also obtain approval in the United Kingdom and South Africa as well as from the largest shareholder in the two companies. Payments for creditors are still not confirmed.

Tshwane Trust, the liquidators of 1time, had previously made an application to the Pretorian high court for a stay of 1time’s return day, when the firm would have been finally liquidated, so as to allow more time for the Fastjet negotiations to proceed.

Prior to its provisional liquidation, 1time ran 33 flights a day across eight routes, connecting South Africa to Kenya, Tanzania and Zambia. High fuel prices and tax increases put pressure on the airline, coupled with insufficient passenger uptake. The company filed for liquidation in October, owing creditors ZAR450 million Rand ($51.7 million).

Fastjet is backed by easyJet founder Stelios Haji-Ioannou and only began flying on Tanzanian routes last month. A second hub is planned in Nairobi next year, with Ghana, Angola and Zimbabwe expected to follow. The airline is looking to cash in on African dissatisfaction with expensive domestic flights and the unreliable nature of aircraft on the continent.

The firm hopes that fares as low as $20 will lure business and leisure passengers as well as those that previously chose not to fly, undercutting even long distance bus prices.

There has been some doubts over the model, with the CEO of Precision Air, Alfonse Kioko, saying: “I’m not saying it’s impossible, but they have not done their research.” Kioko says that taxes, airport fees and fluctuations in fuel prices – as well as the chargeable extras the majority of budget airlines add onto the cost of a ticket – are likely to lead to prices higher than Fastjet have quoted.

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