African low-cost carrier fastjet has been granted permission to launch international flights from Tanzania to South Africa, Zambia and Rwanda marking a major step towards establishing the first-ever pan-African low-cost network. These route approvals have been granted by the relevant Governments under the Bilateral Air Services Agreements (BASAs) between Tanzania and the other countries.
Since launching in Tanzania in November 2012, fastjet has established itself as a provider of safe, reliable air services in Africa, but it has suffered a number of internal and external issues that have impacted its business activities, most recently the departure of Executive Chairman David Lenigas. However, its performance is showing positive signs and in May revenues exceded $1.8 million, up approximately 50 per cent compared with the start of the year with revenue per passenger increasing by 62 per cent since the beginning of 2013.
Limited to domestic activities in Tanzania to date the carrier’s growth has been inhibited by a lack of international routes in its network so the award of these licences is a massive step forward for the business. "This is a monumental day in fastjet's history and brings us closer to our goal of becoming Africa's first pan continental low-cost airline,” said Ed Winter, Chief Executive Officer and Chairman, fastjet.
“We have expended huge effort over the past six months in obtaining these rights and we can only thank the government and population of Tanzania who have lobbied hard to allow us to gain access to the bilateral rights to operate to these countries,” he added.
fastjet will offer flights from Julius Nyerere International Airport in Dar es Salaam to Johannesburg, Kigali and Lusaka and is currently working to finalise schedules for the three routes. All three destinations are currently served from the Tanzanian capital with South African Airways serving Johannesburg, RwandAir flying to Kigali and Precision Air to Lusaka, but fastjet believes its low-fares will enable it to secure marketshare and stimulate the markets further. According to MIDT data, an estimated 96,000 bi-directional passengers flew between Dar es Salaam and Johannesburg in 2012, 19,000 between Dar es Salaam and Kigali the same year and 26,000 between the Tanzanian capital and Lusaka during the calendar year.
"We are especially pleased to be launching flights between Dar es Salaam and Johannesburg and we expect this to be a particularly popular route,” said Winter. “South African Airways has had a monopoly on this route for far too long and we are very keen to offer substantially more affordable fares to customers and further stimulate the potential traffic between these key African cities. This can only have a very positive effect on the critical trade, commercial and tourism industries between South Africa and Tanzania."
The international expansion will become the priority for the fastjet business and will mean plans to establish operations in South Africa will be put on hold, at least for the short-term. Bringing the fastjet brand to South Africa is a cornerstone in the creation of fastjet’s pan-African network but so the carrier can direct all its efforts and resources to starting its international services as soon as possible, the project will be placed temporarily on hold.
“We remain totally committed to launching the fastjet brand in South Africa as soon as possible, but given all the time and effort the team has invested over the past months to secure our international route designations, we have taken the sensible decision to prioritise setting up these lucrative and high profile routes first, before turning our attention to launch the fastjet brand on domestic routes in South Africa,” said Winter.
However, fastjet continues to explore other opportunities across the continent to support its pan-African ambitions and in the past few days has signed a Memorandum of Understanding (MoU) with Nigeria's Red 1 Airways to create a low-cost airline operating within Nigeria and to destinations across Africa.
The start-up, branded as fastjet Nigeria, will bring together fastjet's strong brand, reputation, management experience and economies of scale, and Red 1's local market knowledge within Nigeria. fastjet will hold a minority shareholding in the business and a commercial arrangement will exist with the Nigerian backers for the provision of the fastjet Brand, Operational Framework and Management Services.
"The combination of fastjet's brand and experience and Red 1's extensive knowledge of the local aviation market and Nigerian business landscape, is a perfect foundation for a great airline. The Nigerian people deserve a new airline offering great value and operating to international standards of safety and reliability," said Winter.
The Red 1 project has been on the back burner for a number of years and its backers say an experienced management team has spent ten years fine-tuning the business plan and waiting for the right opportunity to meet the increasing demand for affordable air travel in Nigeria. “We are excited to partner with fastjet and humbled to be working on bringing Nigeria its first true Low-Cost Carrier,” said Dikko Nwachukwu, Chief Executive Officer, Red 1. “The time has now come to partner with fastjet and seek to provide Nigeria with a world-class low cost carrier. At Red 1 our motto is ‘now every1 can fly’ and we aim to make air travel affordable so more Nigerians can choose to travel by air.”
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