EasyJet founder Sir Stelios Haji-Ioannou, pictured, moved closer to launching a pan-African, low-cost airline yesterday after a British investment firm he is part of bought Lonhro's African aviation business.
The deal will see Lonhro's popular, East African, low-cost carrier, Fly540, expand its existing operations before being relaunched as Fastjet later this year.
The deal values Lonrho's aviation division, which operates in Angola, Tanzania, Ghana and Kenya, at $85.7m (£55.1m) and injects that business into Aim-listed cash shell Rubicon in which the easyJet founder took a 5 per cent stake.
Through a reverse takeover, Lonrho will end up with a 74 per cent stake in Rubicon, which plans to relaunch the business as Fastjet.
Ed Winter, chief executive of Rubicon, said customers should expect average fares as low as $70 to $80 on link-ups between fast-growing cities like Kenya's Nairobi and Angola's Luanda.
"It is the optimum time to launch because Africa is hugely under-served from an aviation perspective. It is the last frontier for aviation," said Mr Winter, who was formerly a director of British Airways offshoot GO and then chief operating officer of easyJet. "Africa has a rapidly growing middle class with GDP growth fuelled by oil discoveries. It has few good roads or railways and cheap air travel is a real alternative."
African aviation is noted for its poor safety record and awkward connections.
Investment has been hobbled by complex, cross-border regulation, designed to protect national carriers from competition or foreign takeovers.
African aviation is valued at $56bn a year and passenger numbers on the continent are expected to grow from nearly 68 million in 2010 to more than 150 million in 2030.
From Kenya expert Aly-Khan Satchu: "Africa has so much pent-up potential that if a low-cost airline can get in it's going to create new air corridors,"