Fly540

Fly540

IATA 5H ICAO FFV Callsign SWIFT TANGO
Founded	2006
Hubs	Jomo Kenyatta International Airport
Fleet size	11+9 orders[1]
Destinations	16
Company slogan	Simplifly
Headquarters	Nairobi, Kenya
Key people	Neil Steffen, Don Smith (Chief Executive Officer)
Website	fly540.com

Five Forty Aviation Ltd, trading as Fly540, is a low-cost airline based in Nairobi, Kenya,^[2] that operates domestic and international passenger and freight services.^[3] Fly540 commenced operations in 2006; since 2012, the new pan-African airline Fastjet has had a significant interest in the company.

History

Initial domestic services

Fly540 started operations between Nairobi and Mombasa on November 24, 2006. The service initially operated twice daily using 48-seat ATR 42 aircraft.^[4] The airline's name refers to its price of Sh5,540 per adult return fare between the above-mentioned cities.^[5]

Lonrho Africa was a major investor in the company, paying US $1.5 million for a 49% stake.

In May 2007 the airline introduced two de Havilland Canada Dash 8-100 aircraft to increase the airline's capacity, allowing it to develop new domestic routes. Passenger numbers rose by 93% to 171,160 in the year ended 30 September 2008, from 88,571 in 2007. At the same time, the load factor amounted to 63%, down from 65.8% in 2007.^[6]

Pan-African ambitions

A Fly540 ATR 42 at Entebbe International Airport

The original scheduled flights included freight and passenger services between Nairobi and Mombasa, while Kisumu became a destination in January 2007.^[5] Daily flights on the Nairobi-Malindi-Lamu route were added to its domestic services in February 2007.^[7]

International operations commenced in October 2007 with flights to Juba in South Sudan and Goma in the Democratic Republic of the Congo;^[8] Entebbe in Uganda was added in February 2008. It was planned to expand the Nairobi hub's destinations to Rwanda, Mozambique and Burundi in 2009.^[9] The company's ambition was to become a pan-African carrier, through an expansion to an additional two regional hubs:

"...we will open up Kigali and then head to West Africa. Ghana will be the hub for West African region. In Southern Africa, we shall use Angola as our hub, so it will become a pan African low cost airline".^[10]

Fly540 received authorisation to start operations in Angola in April 2009. The initial plans include domestic flights to Cabinda, Luanda, Soyo, Benguela, Huambo and Malanje,^[11] but an expansion within the region will take place as soon as the domestic market has proven its success.^[9] In June 2009, it was reported that Fly540 was working to set up a regional franchise in Zimbabwe.^[12]

Fly540 Tanzania launched direct flights^[13] between Dar es Salaam and Mwanza, on the western shores of Lake Victoria. Initially the company operated 11 flights a week and it was hoped that in time its Fokker 28 aircraft, which carrie 28 people, would be upgraded to a 50-seater CRJ 100.

Investment by Fastjet

In June 2012 Fly540 was sold for $85.7 million (Sh7.3 billion) to British investment firm Rubicon Diversified Investments (now Fastjet Plc ^[14]), who purchased the airline from Lonrho group. Rubican said it had chosen to acquire Fly540 as its platform for the launch of a budget airline in Africa, to be modelled on Europe's second largest low cost carrier EasyJet.^[15]

The first flights were transferred to the new airline, Fastjet, from 29 November 2012.^[16] These were two domestic routes in Tanzania; it had been expected that all Fly540 flights would quickly be transferred to Fastjet, in turn, as the various arrangements and permissions required for each route are agreed.

Following the acquisition of Lonrho's 49% interest in Five Forty Aviation Ltd, and a further 49.98% economic interest in the company approved at a Fastjet General meeting on 29 June 2012 and completed on 2 July 2012, it became apparent that the vendor did not consider the additional acquisition had completed. The dispute led to legal claims by both parties over the ownership and other matters.^[17] A Memorandum of Understanding was reached on 23 April 2013 where both parties agreed to stop legal proceedings against each other, but because Fastjet now considered they did not have control or significant influence, Five Forty Aviation Ltd has since been treated as an investment in their accounts. The Fly540 operations in Tanzania, Angola and Ghana, however, are fully incorporated within Fastjet's accounts.

Corporate affairs

Ownership and associated companies

Since the acquisition of Lonrho (BVI) Ltd's interest on 29 June 2012, Fastjet has owned 49% of Five Forty Aviation Ltd.

Business trends

The key trends for Fly540 over recent years are shown below. The main sources of published information are the Annual Accounts of Lonrho Plc, where Fly540 formed its Transportation business segment (because although Lonrho owned less than half of the voting power of Five Forty Aviation Ltd, it was able to govern the financial and operating policies of the company by virtue of an agreement with the other investors, and therefore consolidated its interest in the company).^[18] Figures below are as at year ending 30 September until 2010, then 15 months' financials as at 31 December 2011, but only 12 months' passenger statistics:

A Fly540 Canadair Regional Jet CRJ-100ER pictured at Jomo Kenyatta International Airport, Nairobi, in 2012

Destinations

As of August 2013, Fly540 has the following destinations:^[23]

 Kenya

• Eldoret - Eldoret International Airport
• Kisumu - Kisumu Airport
• Lamu - Manda Airport
• Lodwar - Lodwar Airport
• Malindi - Malindi Airport
• Mombasa - Moi International Airport
• Nairobi - Jomo Kenyatta International Airport/Wilson Airport

 South Sudan

• Juba - Juba Airport

 Tanzania

• Zanzibar - Zanzibar Airport

Fleet

Fly540 de Havilland Canada DHC-8-100

As of December 2012, the Fly540 fleet consists of the following aircraft:^[24]

In January 2008, the company signed a US$150 million contract for eight ATR 72-500s to be delivered in 2008 and 2009.^[25] As of July 2011, none of the ATR 72s on order — now totalling nine — have been delivered.^[1]

Accidents and incidents

• On 13 August 2008, a Fokker F27-500 cargo aircraft crashed about 20 km (12 mi) from the Namber Konton airport near Mogadishu, Somalia. All three crew members died. The aircraft was said to be carrying a shipment of khat.^[26] The aircraft had departed from Wilson Airport in Nairobi.^[27]
• On January 27, 2011, a Fokker 27 plane on test flight departing Wilson Airport failed to take off and ran through the perimeter fence into a maize field. The plane had four persons on board, and no injuries resulted ^[28][29]

References

External links

Wikimedia Commons has media related to Fly540.

• Official website

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