The African budget airline backed by easyJet founder Sir Stelios Haji-Ioannou faces a battle for survival after suffering deepening losses in the first half of the year.
Fastjet was forced to raise $10 million in July as working capital and it warned that more cash will be needed by the end of October to enable it to continue operating.
The carrier saw operating losses increase by more than $1 million year-on-year to $14.6 million.
The results show raised capacity in the period following a “stabilisation” plan initiated last year boosted revenue from $21.2 million to $30.1 million.
However, Fastjet said it was in “active discussions with its major shareholders regarding a potential equity fundraising, in the absence of which the group is not able to continue trading as a going concern”.
The airline added: “Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome.”
The cash call came despite a 19% increase in passenger carryings in the first six months of the year, a 10% improvement in load factors and 23% better yields. A distribution deal was also secured with Travelport for tickets to be sold by agents in key markets.
But the airline said: “The directors are still encouraged by trading in the Zimbabwean and Mozambique markets, but the headroom of freely usable and available cash resources is minimal and the company’s ability to continue as a going concern remains very sensitive to its future funding requirements.”
CEO Nico Bezuidenhout said: “Despite achievements in Zimbabwe and Mozambique, the company continued to face several challenges during the period and early part of Q3 2018, with regulatory delays in Tanzania and a sub economical yield environment, and because of this, we have been unable to deploy our newly-acquired ATR72-600 aircraft as quickly as anticipated or planned.
“Other factors impacting Fastjet’s performance include interest payments on legacy debt from several years ago and the start- up losses in Mozambique.
“Operating costs such as fuel and maintenance were negatively impacted by currency fluctuation and a rising global fuel price; both the South African rand and the Tanzanian shilling lost value against the US dollar.
“Slowed economic growth in Tanzania has also adversely impacted consumer and business travel revenue and the first half of the year saw the available customer pool in-market contract.
“Recent changes in the competitive landscape in Tanzania, and the associated impact on the Tanzanian airline and local company have been significant.”