Fastjet shares plunge after stark profit warning

Fastjet's share price plunged early on Monday, after the Africa-focused airline issued a stark warning over its long-term viability as challenging market conditions in the continent continued.

The AIM-traded low-cost carrier, affiliated with the easyGroup through a major shareholding held by Sir Stelios Haji-Ioannou, said it had already taken action to manage operating costs and overheads, and was implementing further measures including reducing capacity and rationalising the route network.

"Based on current management forecasts, the board expects results for 2016 to be materially below market expectations, and the group no longer expects to be cash flow positive for the year," Fastjet's board said in a statement.

The board said it was monitoring the company's cash position carefully, with more than $20m (£14.1m) available at the end of February. Based on current forecasts, that was sufficient to meet operational requirements, it confirmed.

"[We] may consider raising further funds during the year to provide additional headroom and ensure the company has the necessary resources to fund future growth as market conditions improve," the board added.

And while Fastjet remained confident in its low-cost airline model, saying it was well-positioned to capture significant growth potential in the developing African market, the stock market wasn't so sure.

At 0910 GMT, shares in the airline had already fallen by 38.3%, and were sitting at 41.5p.