Sir Stelios Haji-Ioannou set for take-off with a pan-African airline in Lonrho deal

 

Nairobi

EasyJet's founder Sir Stelios Haji-Ioannou 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 the Aim-listed cash shell Rubicon in which the easyJet founder took a 5 per cent share stake.

Through a reverse take-over, Lonrho will end up with a 74 per cent stake in Rubicon, which plans to relaunch the business as Fastjet.

Ed Winter, the chief executive of Rubicon, said customers should expect average fares as low as $70-$80 on link-ups between fast-growing cities such as 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 the 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.

The sector is projected to grow by 4 per cent this year and keep growing at 1 per cent above the global average for the next 10 years, analysts said.

The Kenya-based investment adviser Aly-Khan Satchu said that anyone flying regularly in Africa can see both the potential and the drawbacks of the current service, which is often poor in quality and excessively expensive.

"It's a no-brainer. If you fly around Africa you see fuller planes but some of the highest fares in the world," he said.

Flag carriers such as British Airways have been expanding their coverage of the continent and upgrading planes in recognition of increased business traffic.

However, the South Africa-based analyst Linden Birns warned that many low-cost operators in East Africa, Nigeria and South Africa were struggling to find the finance to upgrade their fleets of 1980s "gas guzzlers" and offer competition to the pricier alternatives. "Africa has got so much pent-up potential that if a low-cost airline can get in and compete it's going to create new air corridors," he said.

Sir Stelios said his recipe of "halving fares" would encourage people who have never travelled by air to fly: "For Africa, with its densely populated cities separated by great distances, this means a new market of millions."

PROMOTED VIDEO
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
Extras
indybest
Voices
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits