Investor Presentation March 2015 Important Notice This - - PowerPoint PPT Presentation

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Investor Presentation March 2015 Important Notice This - - PowerPoint PPT Presentation

Investor Presentation March 2015 Important Notice This presentation, and the information contained herein, is not for viewing, release, distribution or publication into or in any jurisdiction where applicable laws prohibit its release,


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Investor Presentation

March 2015

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Important Notice

This presentation, and the information contained herein, is not for viewing, release, distribution or publication into or in any jurisdiction where applicable laws prohibit its release, distribution or

  • publication. This presentation ("Presentation") is being issued by Fastjet PLC (the "Company") for information purposes in 2015.

The content of this Presentation has not been approved by an authorised person for the purposes of Section 21(2)(b) of the Financial Services and Markets Act 2000. This Presentation is not an admission document or an advertisement and is being provided for information purposes only and does not constitute or form part of, and should not be construed as, an

  • ffer or invitation to sell or any solicitation of any offer to purchase or subscribe for any ordinary shares in any jurisdiction. This Presentation is also not an "offer to the public" as contemplated by the

South African Companies Act, 2008 and it is not directed at prospective recipients in the Republic of South Africa who would fall within such a meaning. Should prospective recipients of this Presentation in the Republic of South Africa not fall within an exemption contemplated by section 96 (1) (a) of the South African Companies Act, 2008, they agree that it is a term of any eventual offer for securities that they act as principal for a total minimum acquisition cost of ZAR1 000 000, thereby falling within the exemption contemplated by section 96 (1) (b) of the South African Companies Act,

  • 2008. Prospective recipients in the Republic of South Africa represent and agree that they fall within at least one of these exemptions. If you are a South African resident, for purposes of the South

African Exchange Control Regulations, you are reminded that you must obtain any necessary approvals from the South African Reserve Bank. Neither the Presentation, nor any part of it nor anything contained or referred to in it, nor the fact of its distribution, should form the basis of or be relied on in connection with or act as an inducement in relation to a decision to purchase or subscribe for or enter into any contract or make any other commitment whatsoever in relation to any Ordinary Shares. No representation or warranty, express or implied, is given by or on behalf of the Company, their respective directors and affiliates or any other person as to the accuracy or completeness of the information or opinions contained in this Presentation and no liability whatsoever is accepted by the Company, their respective directors and affiliates or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. This Presentation does not constitute a recommendation regarding the Company or an investment therein. The contents of this Presentation are strictly confidential and may not be copied, distributed, published or reproduced in whole or in part, or disclosed or distributed by recipients to any other

  • person. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this Presentation or on its completeness, accuracy or fairness.

Certain statements, beliefs and opinions in this Presentation are forward-looking, which reflect the Company’s or, as appropriate, the Company’s directors’ current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed

  • r implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-

looking statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward- looking statements, which speak only as of the date of this document. Prospective recipients should not treat the contents of this Presentation as advice relating to legal, taxation or investment matters, and are to make their own assessments concerning these and other consequences, including the merits of information and the risks. Prospective recipients of this Presentation are advised to conduct their own due diligence and agree to be bound by the limitations of this disclaimer. Financial promotion and the distribution of this Presentation in the United Kingdom are restricted by law. Accordingly, this Presentation is directed only at (i) persons outside the United Kingdom to whom it is lawful to communicate it, or (ii) persons having professional experience in matters relating to investments who fall within the definition "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (iii) high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, provided that in the case of persons falling into categories (ii) and (iii), the communication is directed only at persons who are also "qualified investors" as defined in Section 86 of the Financial Services and Markets Act 2000 (together, "Relevant Persons"). This Presentation must not be acted on or relied on by persons who are not Relevant

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In receiving any information relating to the Company (whether in written or oral form), including the information in this Presentation, you will be deemed to have represented and agreed for the benefit

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with any of the Company) to any person, except as may be required by law, regulation or court order, (iii) not to reproduce or distribute, in whole or in part, (directly or indirectly) any of the information in this Presentation; (iv) that you will comply with all laws applicable to possessing such information, including without limitation insider trading laws, market abuse regulations and applicable regulations and recommendations of the UK Financial Services Authority or any other relevant regulator, and (v) that you are permitted, in accordance with all applicable laws, to receive such information. Any dispute, action or other proceeding concerning this presentation shall be adjudicated within the exclusive jurisdiction of the courts of England. All material contained in this Presentation (including in this disclaimer) shall be governed by and construed in accordance with the laws of England and Wales.

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fastjet’s senior management team

  • 27 years of travel

experience

  • easyJet
  • Jet2.com
  • Jet2 Holidays
  • Virgin Holidays
  • Part of launch team
  • Recently created

role with specific focus on dealing with regulatory issues

  • Based in Nairobi
  • Previous practiced

as corporate lawyer in sub- Saharan Africa

  • Qualified A320

training Captain

  • Caledonian

Airways

  • Thomas Cook

Airlines

  • Brought up in

Nigeria

  • Early flying career

in Zimbabwe

  • 20 years of airline

experience

  • Kenyan national
  • Kenya Airways
  • Virgin Nigeria
  • Senior

commercial roles

  • Over 40 years of airline experience
  • BOAC/British Airways, easyJet
  • COO & Founder Director of Go
  • Managed integration of Go into easyJet

following successful MBO

  • COO of easyJet through period of significant

& successful growth

  • 24 years of airline

experience

  • British Airways
  • Swissair
  • South African Airways
  • easyJet
  • Jetstar
  • Fiji Airways
  • Significant traditional

and low cost airline experience

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4 Safe and Reliable Modern jets with proven LCC model Building consumer confidence Low cost fares starting from $20

(exc. taxes & charges)

One airline brand to the consumer Separate airlines to the regulator Multi-channel distribution network First mover to create a low cost regional African network Peoples’ Champion

  • democratising air

travel in Africa

To operate domestic and international routes in all economically viable African markets

Vision – “To be the most successful pan African low cost airline”

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European levels of safety & reliability delivered by our suppliers

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  • fastjet operates a well proven Low Cost Carrier model - differentiated

from many previous ‘low cost’ (or just low fare) start ups in South Africa.

  • Modern fuel efficient jet aircraft
  • World class maintenance
  • Single aircraft type
  • Short haul, point to point network
  • High resource utilisation
  • No frills - profitable ancillary revenue streams
  • Complexity engineered out
  • Flat management structure
  • Empowered staff
  • Using low fares to stimulate the market

fastjet’s low cost business model

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fastjet’s opportunity

Source : The Economist (Nov 10th 2010)

  • 1.1 billion people
  • US1.4 trillion consumer spend

by 2020 (McKinsey)

  • Oil, gas and minerals exports

fuelling economy

  • Visible signs of consumerism
  • Relative political stability
  • Infrastructure development

Africa - 15% of world population, 20% of land mass, 3% of aviation

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  • African aviation market is immature but growing
  • Safety issues (11.5 accidents per million flight hours in Africa vs

2 accidents in rest of the world (IATA 2012))

  • Currently less than 0.1 seats per capita per annum
  • fastjet estimates that at least 160m more intra-African aviation

seats required by 2030

  • Only seven international intra-African flights currently flown by

Low Cost Carriers (four operated by fastjet)

Annual Seats (millions) South Africa 23.4 Nigeria 10.9 Egypt 5.1 Kenya 4.8 Tanzania 2.6 Ethiopia 2.4 Morocco 2.4 Algeria 2.4 Other 29.9 Total 84.2

Putting into perspective* Intra-African seats*

Annual Passengers (millions) Heathrow 72.3 Manchester 20.7 Bristol 6.1 Belfast City 2.5

* Illustrative data – 2012/13

fastjet’s opportunity

Africa - 15% of world population, 20% of land mass, 3% of aviation

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Fly540 Kenya bought by Lonrho plc 2006 Lonrho explores disposal of Fly540. Discussions with Stelios 2012 easyGroup Consultancy project to develop pan African Low Cost Model commences 2012 fastjet’s 1st domestic flight in Tanzania Nov 2012 Fly540 reversed into AIM cash shell Rubicon Plc - renamed fastjet Plc July 2012 1st international flight Dar es Salaam to Johannesburg Oct 2013 1st year >350,000 fastjet seats sold Nov 2013 Routes added to Zambia, Zimbabwe & Uganda throughout 2014 Disposal of Fly540 Kenya Jun 2014 1,000,000 fastjet seats sold fastjet’s first profitable trading month Dec 2014 Lonrho Plc develops Fly540 in Tanzania, Ghana and Angola 2011- 2012 Lonrho taken private July 2013 fastjet shareholding sold between June – November 2013

fastjet’s development timeline

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11 Geo-targeted pricing ensuring lower fares available locally Swahili site added Oct 2014 up to 30% of revenues through mobile money

>10 %

Remarkable sales conversion level Social media promotes the brand Ancillary revenue links increase user engagement

  • n website

Mobile phone site growing in importance

fastjet’s market leading digital success

3,564,652 visits 4.89 pages per visit

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Current performance – Tanzania

  • fastjet Tanzania is growing successfully since its inaugural flight Nov 2012
  • Key performance indicators

– Over 1,000,000 seats sold to date (35% first time fliers according to fastjet survey, December 2014) – Average booking window increased by 26% in 2014 – Network Load Factor Average above 70% – Reliability: 90% punctuality (arrivals within 15 minutes of schedule) – In a passenger survey, 95% of passengers surveyed said that they would fly with fastjet again

Services from Dar es Salaam – currently 3 aircraft Domestic Mwanza - up to 4 times daily Mbeya - twice daily (only operator) Kilimanjaro – up to 3 times daily International Jo’burg, South Africa – 3 weekly Lusaka, Zambia - 4 weekly Harare, Zimbabwe – 3 weekly Entebbe, Uganda – 4 weekly

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Source: Google flight schedule – 17th January 2015

  • fastjet increasingly dominant in Tanzanian markets, substantially growing the market
  • Dubai link provides “through passengers” for local traffic
  • Nairobi traffic offers strong growth possibility when licence received

Dar es Salaam – growth from DAR airport

2000 4000 6000 8000 10000 fastjet (55) Emirates (14) Kenya Airways (35) Precision Air (45) Qatar Airways (14) Ethiopian Airlines (14) KLM (7) South African Airways (14) flydubai (7) Turkish Airlines (7) Oman Air (5) Egyptair (3)

Top 12 airlines - weekly seats (flights) from DAR 2015

1000 2000 3000 4000 5000 6000 7000 Dubai Kilimanjaro Mwanza Nairobi Johannesburg Zanzibar Doha Addis Ababa Amsterdam Mbeya Istanbul Muscat

Top 12 destinations - weekly seats from DAR 2015

Seats Seats

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$- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 Q1 Q2 Q3 Q4

Quarterly Total Revenue by Year

2013 2014

Year on Year Growth

  • Passenger volume up 63%
  • Capacity increased by 62%
  • Load factor from 72% to 73%
  • Revenue per passenger including ancillaries up by 27%

Clear positive momentum in Tanzanian operation

(2014 revenue figures subject to audit)

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  • Organic growth
  • Increasing frequency on existing routes
  • Linking current domestic destinations e.g. Mwanza - Kilimanjaro
  • Operating to new domestic destinations as the airfields are upgraded to take A319 aircraft
  • Adding new international destinations - including Lilongwe, Nairobi, Mombasa, Lubumbashi
  • Competitors in Tanzania increasingly focusing on smaller routes
  • The existing aviation infrastructure supports planned growth to breakeven and beyond
  • Operating flights from Entebbe, Uganda
  • Uganda CAA lost its regulatory approval after failing ICAO audits
  • Air Uganda and other Uganda regulated airlines have been shut down
  • There is a lack of air capacity
  • Growing the Tanzanian fleet
  • The fleet plan is 8 aircraft by 2018 (excluding Uganda operations) - Potential over time is far greater

Plan to build out the Tanzanian base

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Opportunities to develop beyond Tanzania

  • Key opportunities identified across the region
  • Kenya, Uganda, Zambia, Zimbabwe, and South Africa are major growth opportunities
  • These are English speaking countries with strong historic links dating from their British heritage
  • Their geographical proximity enables significant synergy opportunities including aircraft, maintenance

and crew

  • Total population is approx. 210m, with currently fewer than 0.1 regional air seats per head of

population per annum

  • No reported cases of Ebola in the countries in which we plan to operate (source: WHO 5 November

2014) – we are closer to Monrovia when in London than in Dar es Salaam (5,099km vs 5,693kms)

  • Potential for fastjet growth
  • By 2018, fastjet expects to carry up to 10 million passengers per annum
  • Representing only a 13% market share of estimated pan African passengers in these markets
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  • Create fastjet brand airlines across all key countries in Africa
  • Expand rapidly to gain first mover advantage
  • One airline to the consumer - consistent delivery of safety, reliability, service, brand and quality
  • Integrated network and revenue management to maximise value
  • Local management of each fastjet airline
  • Centralised functions will provide economies of scale and knowledge share
  • Internal services will be designed to deliver synergy benefits across the countries
  • Overall fleet structure will be designed to optimise fastjet Group aircraft utilisation
  • A Group approach to contracts and service providers will allow efficiencies and reduce fixed costs
  • A centre of expertise will develop and support fastjet airlines across the region
  • Centralised services to be geographically located for optimum costs and performance

Pan African growth strategy

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Foundations in place – poised to seize the opportunity of pan African expansion

  • The Plan
  • Creating a pan African Low Cost Airline network
  • Business model to overcome regulatory restrictions
  • One airline to the customer with network wide consistent brand delivery
  • Positioned to gain first mover advantage
  • Using a fleet of Airbus 319s we differentiate against the competition with reliability and safety
  • Progress
  • Tanzanian operation profitable in the month of December 2014
  • Low Cost Airline model successfully implemented in Tanzania operating three aircraft
  • Dominating the Tanzanian domestic market on our routes
  • Breaking down regional regulatory resistance – four international routes already operational
  • Brand, reputation, communication and distribution channels successfully established
  • Legacy Fly540 restructuring well advanced
  • The Opportunity
  • Further developing Tanzania by increasing frequency and adding new routes by managing through

the regulatory issues

  • Expansion beyond Tanzania, initially in Zambia, Zimbabwe, Kenya, Uganda, and South Africa
  • Potential to reach a fleet of 34 aircraft by 2018
  • Investment to take the company through expansion and create significant value
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