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UPDATE - Fastjet revenues climb but headwinds to hit second half

Sales in the six months to June jumped by almost two-thirds to US$31.5mln

-- adds broker comment --

Low cost carrier fastjet (LON:FJET) cautioned weak African currencies and commodities will affect its second half despite revenues soaring and the size of its fleet doubling to six planes.

Sales in the six months to June jumped by almost two-thirds to US$31.5mln, with the numbers of passengers carried rising by 56% and income per passenger 7% higher.

Losses also fell to US$9.8mln from US$20mln, with an underlying reduction by US$7mln to US$12.8mln.

Ed Winter, chief executive, said better utilisation of the three aircraft in its fleet during the period was behind the improved underlying numbers.

But delays to the start of operations in Zambia and Zimbabwe and weak commodity prices and currencies had since had a significant impact on revenue per passenger.

The launch of the Zambia and Zimbabwe operations are now expected in mid-November and early December respectively, which has resulted in all of their start-up expenses plus the costs of doubling the fleet being incurred in 2015 with no additional revenue.

As a result, a higher loss for 2015 is now expected, though the airline remained confident of meeting 2016 forecasts as the new routes and extra planes start to contribute.

Winter added that it also took ownership of its first aircraft on 25 September, the sixth in its fleet, and earmarked to be the first in the new Zambia-based operation.

Sanlam said the delays in the new operations will mean expected revenues of more than US$22mln being pushed back into next year.

Even so, it still believes, fastjet is in a prime-position to capitalise on the development of the sub-Saharan African airline market, where the middle classes are growing and there is increased investment.

Shares eased 6% to 84.5p.