Bloomberg News

Stelios to Invest $500 Million in Low-Cost West Africa Airline

February 27, 2012

Feb. 22 (Bloomberg) -- 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 aircrafts 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, in an interview in Accra Feb. 20. Lonrho operates Fly540, a low-cost airline that operates in East Africa and 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.

--Editors: Emily Bowers, Hilton Shone

To contact the reporter on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net

To contact the editor responsible for this story: Emily Bowers at ebowers1@bloomberg.net


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