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Old February 26th, 2012, 03:11 PM   #1
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Stelios to Invest $500 Million in Low-Cost West Africa Airline

Stelios Haji-Ioannou, the founder of discount carrier EasyJet Plc, plans to invest $500 million in a low-cost African airline with Ghana’s capital, Accra, as its regional hub.

“We could link Ghana to 10 or 15 different countries in West Africa,” said Ed Winter, former chief operating officer of EasyJet and a member of the management team of Stelios, who goes by his first name. They are in Ghana to conduct studies into starting the airline, he said in an interview in Accra Feb. 20. “We are looking at 15 aircraft with an investment value of $500 million.”

Ghana’s economy, the second-biggest in West Africa at $31 billion, has attracted interest from airlines since the 2007 discovery of oil for export at the Jubilee field. United Airlines and Turkish Airlines began flights in 2010, while TAP of Portugal started flying last year.

The low-cost airline, called Fastjet, would carry 5 million passengers each year in the region, White said in an e-mailed response to questions.

West Africa is “so underserved” by airlines, said Geoffrey White, chief executive officer of Lonrho Plc (LONR), in an interview in Accra Feb. 20. Lonrho operates Fly540, a low-cost airline that operates in East Africa and runs domestic flights in Ghana and Angola. It is looking to “potentially partner Stelios” in its African operations, White said.

High aviation taxes are barriers to operating in West Africa, said Winter. “We could start with five aircrafts in the first year and add the 10 aircraft well within two years, but that relies very much on bringing tax levels in West Africa down to the same levels we see in Europe and Asia,” he said.

Winter and other officials with Stelios’s group plan to meet with officials of Ghana’s aviation, transport and trade ministries to discuss the need to lower tariffs, he said.
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Old February 26th, 2012, 05:18 PM   #2
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This is BIG news. This is LONG overdue. It will increase links between countries and tourism including business tourism will grow. I will post it in the main group.
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Old February 29th, 2012, 07:33 PM   #3
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i can finally fly to dakar without needing to save for a year! great news!
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Old February 29th, 2012, 10:27 PM   #4
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High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/2cc1a644-5...#ixzz1nnwpipfY

Sir Stelios plans west African venture

By Arash Massoudi

Sir Stelios Haji-Ioannou is planning to launch his new airline venture in west Africa in the coming months with up to 15 jets in what may eventually become an African version of EasyJet, the UK low-cost carrier he founded.

Sir Stelios is poised to report the results of a feasibility study run by his EasyGroup management team for Rubicon, a cash shell which raised £9m in a December placing to fund the launch of the airline, to be called Fastjet.

The study is expected to recommend that Fastjet link about six west African countries to Accra, the Ghanaian capital. Two people familiar with the study said that up to 15 aircraft could be leased initially. If successful, Fastjet will eventually expand across Africa, they added, to become the first pan-African low-cost carrier.

“There’s a very serious plan to make Rubicon into a very serious low-cost carrier,” said David Lenigas, a Rubicon board member and chairman of Lonrho, the pan-African conglomerate.

“One of the attractions is that west Africa is very poorly served other than with national carriers that don’t have the proper models to do regional low-cost service,” said Geoffrey White, Lonrho chief executive and also a Rubicon board member. “The initial assumption could look to have 5m passengers a year passing through Ghana.”

Lonrho owns a 12.7 per cent stake in Rubicon and also runs Fly540, a low-cost airline that operates regionally in east Africa and domestically in Ghana and Angola.

“There’s probably going to be an association with Fly540 in Ghana and it will make the whole thing bigger and a whole lot better,” said Mr Lenigas.

Rob Burnham, chairman of Rubicon, said there was space for collaboration with Fly540 but cautioned against suggestions of a reverse takeover on grounds that the airline did not have a jet fleet. “That doesn’t fit with our long-term plans, but Fly540 does operate in Ghana and it does have some infrastructure that could be of use for us in launching this.”

On speculation that Fastjet could rapidly expand throughout the whole of Africa, Sir Stelios tried to damp down expectations. “The concept works best on short flights of about one to two hours,” he told the Financial Times. “This company has to learn how to walk before it can run.”

Sir Stelios said that he has not yet decided whether he will invest directly in Rubicon. Earlier reports suggested that Sir Stelios was planning on making a $500m investment in Fastjet.

In December, Rubicon received exclusive branding rights for Fastjet from EasyGroup for 12 months in exchange for a payment of £480,000, a 5 per cent stake in the company and further royalty fees.

A day ahead of a much anticipated showdown over bonus pay with EasyJet executives, Sir Stelios said that Fastjet would not violate the terms of his non-compete agreements with EasyJet. “Even if it is still in force, it has a very narrow restriction in time and geography,” he added.
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