LCC fastjet is eyeing modest regional growth, but high costs and the availability of fuel in Africa make operations for regional air traffic challenging.
Budget carrier Fastjet is suspending operations in Mozambique because of rising competition and overcapacity on the routes it operates. However, it plans to return to the market “once demand for air travel in the country increases”.
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Low-cost African airline Fastjet, which operates 13 routes in Mozambique, South Africa, Tanzania and Zimbabwe, has warned it could go bust unless new funding is secured.
The second panel session of the Routes Africa Strategy Summit saw esteemed professionals from the aviation industry discuss the impact of tourism within Africa. The panel was moderated by Edward Robertson, editor of Routes News, and featured Richard Bodin, chief commercial officer of fastjet; Fernando Estrada, chief strategy officer of Vueling; Stephanie Wear, director of economic and air service development Tenerife Tourism Corporation and Yolanta Strikista, director of Strikista Consulting.
To date, passenger traffic between the major cities of Dar es Salaam and Nairobi, which have a combined population of over eight million people, has been limited by high air fares which we believe, have excluded large parts of the local population from air travel. The only alternative to flying is to undertake a long and difficult journey by road, which can take up to 12 hours.
The new fastJet service will not only support local demand to/from Dar es Salaam but also provide new connection opportunities to the low-cost carrier’s international flights into Tanzania, significantly offering an alternate link to Johannesburg to support growing leisure demand from South African holidaymakers.
The granting of the ASL clears the way for fastjet Kenya to commence the application process for an Air Operator Certificate (AOC) which, once received, will allow the airline to operate domestic flights within Kenya. However, it will remain a long, and arduous journey before the budget airline begins flights.
WATCH exclusive content from this year's World Routes Strategy Summit. Here we highlight the key factors that are holding back fastjet in in its ambition to develop a pan-African network from the 'Airline Challenges & Growth Concerns' panel session.
The expanding airline already operates into Zimbabwe from the Dar Es Salaam base of its original Tanzania business, but the arrival of the new aircraft represents a significant step forward in its activities in southern Africa. It will initially use the aircraft to launch domestic flights between Harare and Victoria Falls.
This winter, fastjet will add additional capacity on routes to Johannesburg, South Africa; Harare, Zimbabwe and its recently launched service to Lilongwe, Malawi this winter, as well as increasing its domestic offering to Kilimanjaro and Mwanza.
Although the route is initially scheduled to be flown on a twice weekly basis, fastjet has already hinted that more capacity is expected to be added as demand increases. The airline has already opened reservations for the service with fares starting from $50 one-way, excluding airport and government taxes.
With its low-cost fares, fastjet expects many of its passengers on this new route to be first time flyers who would otherwise not have been able to afford to travel by air. Supporting this expectation is the research undertaken by the airline in December 2014, which showed that 35 per cent of its passengers were first time flyers.
The budget carrier has seen a strong start to the year with its Tanzania business reporting a 52 per cent rise in passenger numbers in May 2015 compared to the same month last year. Over a rolling 12 month period to the end of May 2015, the airline carried 716,350 passengers, up 76 per cent on the previous 12 months.
The low-cost airline currently has a fleet of three aircraft which are fully utilised, and additional aircraft will be required to support the planned expansion of the airline.
The award of the Air Service Permit (ASP) from the Ministry of Transport and Infrastructural Development of the Government of Zimbabwe, which is responsible for administering the Civil Aviation Authority of Zimbabwe (CAAZ), is a significant step towards the Company obtaining an Air Operating Certificate (AOC) and its plans to grow its footprint in Sub- Saharan Africa.
The low-cost carrier, a subsidiary of fastjet has received confirmation from the Zambian Civil Aviation Authority that is has successfully completed the critical ‘Phase 1’ of its application for an Air Operating Certificate (AOC).
Two years can be an eternity for a startup airline and there are examples in East Africa that some did not survive the first two months of operations before folding again. The same cannot be said for Fastjet, Tanzania which celebrating its second birthday.
African low-cost carrier fastjet has taken a significant step towards launching operations in Zambia after its new local business received an Air Service Permit (ASP) from the authorities in Zambia, while fifth freedom rights from Uganda will enable it to grow its network from Entebbe International Airport.
The airline says forward bookings for the current twice-weekly flights are “well ahead of management expectations” and with the first flights from Zimbabwe already “operating to full capacity”, fastjet has quickly decided to boost the frequency of the link.
Despite confirming its intention to establish a new Kenyan budget airline business following the disposal of Fly540 Kenya, fastjet remains quiet over its plans for the venture and simply confirms that further information on the airline’s conception will be announced in due course.
