Fastjet will suspend its operations to Mozambique from 26 October including flights under its code-share arrangements with LAM Mozambique Airlines.
The decision has been taken by Fastjet in response to stronger competition in Mozambique, which began to intensify at the end of 2018 with the market entry of Ethiopian Airlines as a domestic carrier.
The increase in aircraft and capacity supply, coupled with two category five tropical cyclones at the beginning of 2019 which suppressed passenger demand, led Fastjet to scale back frequency on routes and to reduce overall capacity in Mozambique.
As a result, Fastjet reported significantly reduced revenue of $1.9 million in the first half of 2019, down from the previous year's total of $4.2 million out of total revenue for the group of $19.7 million.
Mark Hurst, Fastjet interim chief executive officer, said: "The detrimental financial impact of ongoing supply and demand challenges means that suspending our Mozambique operations is the right course of action at this time. However, we remain committed to Mozambique, will be monitoring the market environment very closely and expect to return there as and when the situation improves."