The slump in oil prices is has brought a boost to African low-cost carrier Fastjet.
The airline does not pre-purchase or hedge its future fuel rates and is now realising “substantial benefits” from the reduction in the cost of crude oil.
The carrier buys its fuel via a central buying platform that consolidates the needs of a number of small airlines across Africa.
The scheme provides both economies of scale not usually enjoyed by an airline of Fastjet’s size, and unencumbered access to fuel across the continent, according to the carrier.
Interim chairman and chief executive, Ed Winter, said: “”With fuel representing around 40% of our operating costs and oil prices forecast to remain at these low levels through early 2015, Fastjet is directly benefiting from the reduced oil price.”
He was speaking today as the airline marked its second anniversary of its launch and released November passenger carryings.
Fastjet operations in Tanzania flew 63,146 passengers in the month – 90% up on November last year.
Forward sales for December are up by 99% with a 30% rise in average yield over the same month in 2013. The airline plans to run additional flights on certain routes to meet high season demand.
Winter said: “We are very pleased with our trading position in Tanzania. November results are strong as we maximise our market leading position in the country. December is a critical month and the early signs are very positive.”