Uganda Civil Aviation Authority grants 5th freedom rights to Africa airline

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Written by Linda Hohnholz

In a breaking news development, it was just confirmed that an African airline, already flying from Dar es Salaam to Entebbe, was granted fifth freedom rights by the Uganda Civil Aviation Authority (UC

In a breaking news development, it was just confirmed that an African airline, already flying from Dar es Salaam to Entebbe, was granted fifth freedom rights by the Uganda Civil Aviation Authority (UCAA) to commence operations out of Uganda, using their Tanzania-registered aircraft for flights.

The destinations given to Fastjet airline are Juba, Nairobi, Johannesburg, and Kigali, to be flown on behalf of Uganda. What is now required, though, is the reciprocal approval by the Civil Aviation Authorities in South Sudan for the route from Entebbe to Juba, from the Kenya Civil Aviation Authority for flights from Entebbe to Nairobi โ€“ a major challenge considering that Fastjetโ€™s application for scheduled flights from Dar es Salaam to Nairobi is still โ€œparkedโ€ on the desk of a bureaucrat, as well as from the relevant bodies in South Africa and Rwanda for the Johannesburg and Kigali routes.

Meanwhile, in other breaking news, it was confirmed that Fastjet PLC has signed an agreement with Tanzanian investors to acquire additional shares in the company, raising the local share holding above the 51 percent margin.

From further down south yet more breaking news was confirmed as the Zambian authorities have reportedly granted the important Air Service Permit, the penultimate step before obtaining an air operator certificate and then launching flights from Lusaka to domestic and regional destinations.

Said the media statement received from Fastjetโ€™s corporate communications office:

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Zambia Air Service Permit (ASP) granted

fastjet plc is pleased to announce that fastjet Zambia Ltd has received an Air Service Permit (ASP) from the authorities in Zambia.

The ASP approval marks a major step towards launching fastjet operations in Zambia and will give the airline the authority to operate air services to both domestic and international destinations within and from Zambia.

The fastjet Zambia team is now focused on continuing the submission of the necessary documents and manuals to complete the application process for an Air Operating Certificate (AOC) which will then allow the commencement of operations.

Ed Winter, Interim Chairman and Chief Executive Officer of fastjet plc, said: โ€˜We have been working tirelessly to roll out the fastjet model across the region and obtaining the ASP in Zambia is a really positive step forward. We still have to obtain the full AOC, but this vote of confidence from the authorities is a major step along that road. Timescales before the first flight will be dependent on the time taken for the authorities to review the AOC application documents. We look forward to going on sale and commencing operations in Zambia once that process has been completedโ€™.

fastjet commenced the process of obtaining the necessary licences earlier this year. Receiving an ASP means that the Zambian Civil Aviation Authority and the Ministry of Transport has approved the business plan, aircraft choice and proposed structure of the planned airline as appropriate to operate in Zambia.

Zambia will be fastjet’s second base from which it plans to operate low cost flights to various destinations in East and Southern Africa. Prices on regional routes from Zambia are currently very high especially so where a monopoly operator controls the route. Fastjet is confident that its low cost model will stimulate the market.

Uganda 5th Freedom Flights approved by Uganda

fastjet commenced operations from Dar es Salaam to Entebbe on the 16th September, and added additional flights in October and this new permission will further establish fastjet in Uganda and assist in the process of offering additional destinations to fastjet’s growing network.

Since Air Uganda ceased flying, the fares offered by other carriers for flights linking Uganda regionally have risen steadily. With fares, starting from as low as US$50 plus government taxes, fastjet is confident that it will attract considerable customer support.

In addition, fastjet plc is pleased to announce that it has received permission from the Uganda Civil Aviation Authority to operate flights from Uganda to Juba, Nairobi, Kigali and Johannesburg under โ€˜5th Freedomโ€™ rights using Tanzanian based aircraft. Once the authorities in the relevant countries provide their approvals fastjet Tanzania will be able to offer flights linking Entebbe with these destinations.

Ed Winter, Interim Chairman and Chief Executive Officer of fastjet plc, said: โ€˜5th Freedom rights present a fantastic opportunity to increase the Tanzanian network, increasing aircraft utilisation and also establishing the fastjet brand in Uganda without the immediate establishment of a full Ugandan baseโ€™.

IATA definition 5th Freedom: This freedom is also sometimes referred to as “beyond rights”. It is the right of an airline from one country to land in a second country, to then pick up passengers and fly on to a third country where the passengers then deplane

Tanzania

The Company is pleased to announce it has signed an agreement to enable Tanzanian participation in the ownership of fastjet Airlines Limited, its Tanzanian based airline (fastjet Tanzania).

fastjet Plc and fastjet Tanzania today entered into an agreement with Enterprise Growth Market Advisors Limited (EGMA) for the purpose of selling an interest in fastjet Tanzania to Tanzanian investors. As part of that agreement, fastjet Tanzania today issued 835 shares in its share capital (the Tanzania Shares) to fastjet International Limited, a company incorporated in Tanzania (fastjet Holdco), which is in turn is owned by four Tanzanian nationals including Ami Mpungwe, George Carmichael Theobald, John Corse and Sophia Rwegellera (the Tanzania Shareholders). fastjet Tanzania also issued a further 17 shares in fastjet Tanzania to each of Ami Mpungwe and Lawrence Masha, the two Tanzanian non-executive directors of fastjet Tanzania, being 34 shares in total and representing 2% of its enlarged share capital. The issue of these shares brings the total Tanzanian legal and beneficial ownership of fastjet Tanzania to 51%.

As a consequence of these changes fastjet Tanzania is expected to benefit from entry into new markets and have greater access to more international African destinations through the various Bilateral Air Service Agreements to which Tanzania is a party.

The Board of fastjet believes that the issue of the new shares and the Placing Arrangements will provide the near term benefit of local shareholding in Tanzania. It will initiate the process of finding suitable long term Tanzanian shareholders with the aim of fulfilling fastjet’s ambition of having airline companies in strategic African jurisdictions which are part owned by nationals of the countries in which they are based to help in creating a truly pan-African airline.

Funding

As set out in the interim results in September, until the contribution from operations exceeds central costs, there will be a requirement for additional funding for the Group. Furthermore, additional funding will be required for each significant phase of expansion including that in Zambia and Uganda, outlined above, as well as its near term working capital.

The Board is in discussions with a number of potential funders, including industry partners and specialist African investors, with a view to investment both at the Group level and at the individual operating company level. The Company is aiming to complete this necessary funding by early in the New Year.

Ed Winter, Interim Chairman and Chief Executive Officer of fastjet plc, said โ€˜We are delighted to have found a suitable structure which allows for Tanzanian participation in fastjet Tanzania, whilst providing the opportunity to raise capital from local Tanzanian investors. This is a positive and logical step in the implementation of our model of local investment and local finance for growth, and will aid in fastjet Tanzania being granted additional rights under Bilateral Air Service Agreements with other African countries on the continent. It is pleasing to see that as a result of Management focus on the regulatory framework, approvals in both Uganda and Zambia have been granted. This is a very significant step along the road to becoming a truly pan African Low Cost airlineโ€™.

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About the author

Avatar of Linda Hohnholz

Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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