London - Shares in Fastjet crashed 36 percent yesterday after the low-cost airline that wants to be a pan-African carrier issued a profits warning following a prolonged downturn.
The shares collapsed by 24.25p to 43p as the airline, started by EasyJet's founder Sir Stelios Haji-Ioannou, said that it would not be cash-flow positive this year as hoped. It had already issued two profit warnings in the past year.
Read: Stelios calls for removal of Fastjet CEO
Fastjet said that it was considering cutting routes from the nascent network. The airline also said it could raise more funds, to give it headroom as it struggles to grow.
The airline is already facing a challenge from Sir Stelios, who has a 12.6 percent stake and last month requested a shareholder meeting, calling for the immediate dismissal of Ed Winter, the airline's chief executive, and general counsel Krista Bates.
Sir Stelios yesterday repeated his call, adding: “Fastjet has a bloated cost base... The only way to reduce the overhead is for Ed Winter to leave the company now and the chairman to start the cost-cutting.”
The budget carrier said that it had more than $20m (£14m) of cash from which it could fund its current operations and insisted that it was confident of its business model and the significant growth potential of the African market.
THE INDEPENDENT