Magazine article African Business

FastJet Sends Feathers Flying: The Entry of FastJet, the African Version of Europe's EasyJet, into the East Africa Aviation Space Is Causing Quite a Stir. the New Airline Has Promised Fares That Could Be Cheaper Than Those for Buses on Similar Routes, Let Alone Fares Charged by Other Airlines. Expect a Ding-Dong Battle for Customers, Writes Our Kenya Correspondent, Wanjohi Kabukuru

Magazine article African Business

FastJet Sends Feathers Flying: The Entry of FastJet, the African Version of Europe's EasyJet, into the East Africa Aviation Space Is Causing Quite a Stir. the New Airline Has Promised Fares That Could Be Cheaper Than Those for Buses on Similar Routes, Let Alone Fares Charged by Other Airlines. Expect a Ding-Dong Battle for Customers, Writes Our Kenya Correspondent, Wanjohi Kabukuru

Article excerpt

We are not here for competition. We are here to offer a service that is very much needed in the continent," Richard Bodin, FastJet Plc Chief Operating Officer says.

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"It's about democratising air travel, enabling huge numbers of middle-class African consumers to travel quickly, cheaply and safely." Bodin was in Nairobi to set the tone for what is seen as a deliberate undertaking to write a new chapter of Africa's aviation industry. It is not lost to aviation watchers why FastJet, billed as the continent's 'first pan-African low cost airline' has chosen East Africa, and most specifically Nairobi to announce the launch of its operations in Africa.

Nairobi is East and Central Africa's communications hub and home of one of the continent's most successful airlines, Kenya Airways (KQ). However, while the announcement was made in Nairobi, FastJet's first operational base is in Dar es Salaam, Tanzania, and Bodin explains why: "In Tanzania, the F1y540 brand will close down once we launch in a couple of weeks. In Nairobi, for some time, both brands will exist because there were some operational issues of flying an A319 in some destinations that F1y54o flies to. Both brands will operate alongside each other for some time."

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Events in the region's aviation sector in the last year have shown a trend that has left many baffled. On the one side, the sector has been described as facing heady turbulent times. On the other, it has indicated a sense of buoyancy and bullish attitude to ward off the tough times. Indeed, for the last few weeks, reports on the region's aviation industry have showcased a sector that was depressed and facing harsh economic times with little chance for profits in the near future.

In September, Virgin Atlantic announced that owing to low passenger numbers, increasing taxes and fuel costs, it was discontinuing its Nairobi-London flights. A month later in October, Bahrain's Gulf Air became the second airline to stop flying to Nairobi. Add to these Kenya Airways' retrenchment woes (See African Business, November 2012) and the scenario of a sector in crisis emerges. Interestingly, however, the main players are exhibiting a bold stance of optimism even in the face of shrinking profits.

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Indeed, when Bodin announced that FastJet was going to be a point-to-point airline covering East African cities and towns for fares as low as $20, he seemed to be redefining the aviation industry in the continent and defying the current tide that calls for caution and guarded spending. "Our lowest fares stand at $20 and on average it will be $80," Bodin explains. "We are not interested in a price war."

He says the low-cost airline model uses lower fares to attract large numbers of additional passengers. The low fares target is to entice newer passengers who may have not flown before and instead spend long hours in bus travel to shift to the affordable airlines. "The global experience of launching a low-cost carrier is that it creates a completely new market rather than simply driving down prices in the existing market. We want to enable people to swap arduous bus journeys for convenient flights just as Brazil, Asia and Mexico have done."

This strategy means that the airline will not only challenge other airlines but will carry the fight all the way down from the air to the land, aiming at intercity and cross-border buses. The low fares that Bodin mentions are indeed lower than bus fares for Nairobi-Dar es Salaam/Nai-robi-Kampala/Dar es Salaam-Kampala routes.

JamboJet throws down the gauntlet

FastJet's story goes back to June this year when the UK-based investment firm, Rubicon, paid $86m to secure 49% of Lon-rho's aviation business F1y540. FastJet is the holding company of Fly540 and will use Fly540's existing infrastructure, hubs and airline licences in Kenya, Tanzania, Angola and Ghana to operate. …

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