Shares in troubled African budget airline Fastjet nosedived today after chairman Colin Child stepped down, warning of a "challenging trading environment".
Shares fell as much as 17 per cent, to 14.4p, after the company said it will need to raise further capital - just months after it raised £15m. It said it will complete its latest round of fundraising in the first quarter of next year.
But it added that it reckons it can cut operating costs by 10 to 15 per cent by switching from its existing fleet of 145 A319 aircraft to smaller Embraer e-Jet E190s.
It's also "aggressively" changing its routes, increasing service frequency between Harare and Johannesburg, but suspending services between Johannesburg and Victoria Falls.
The company said Child, who has only been on the board since the end of last year (and was a pretty controversial figure, with EasyJet founder Sir Stelios Haji-Ioannou attacking him in a letter), is stepping down because he believes "it would not be appropriate for im to continue in this role given the company is initiating, sooner than expected, a further fund raising exercise".
"Although the trading and operational environment has been challenging I have much enjoyed my time on the Fastjet board," he added.
Chief executive Nico Bezuidenhout will act as interim chairman. He said:
"Since my arrival in August, the company has made substantial progress in implementing the stabilisation plan and has, in the process, resolved and attended to the key financial, contractual and structural legacy matters that would otherwise have served to impede future performance," she said.
"The journey has not been a straightforward one but with our costs due to substantially reduce in the New Year as various legacy and restructuring costs come to an end, with our revenue generating initiatives beginning to bear fruit and with various geographic and strategic expansion opportunities being identified I am confident that, with the necessary capital, the company can break even by the fourth quarter of 2017."