Fastjet entry sparks price war on Nairobi-Dar es Salaam route

The entry of Tanzania’s Fastjet airline into the Kenyan skies has sparked off price wars on the Nairobi-Dar es Salaam route.

The national carrier, Kenya Airways, has cut its fare by about 30 per cent, on the day when Fastjet entered Kenya.

Monday, Fastjet’s Airbus A319 touched down at Jomo Kenyatta International Airport (JKIA) at 11.10am with 70 passengers aboard the 156-seater.

The London Stock Exchange-listed airline, which operates on a low-cost model, has priced its ticket from Dar es Salaam to Nairobi at Sh13,200, forcing the troubled KQ to silently lower its prices.

For instance, a return trip from Dar es Salaam to Nairobi on KQ for a passenger wishing to travel on Friday January 22, 2016 and back to Nairobi on 25, would cost $383 (Sh39,170).

However, in an advert in the dailies, which did not make any reference to previous rates, put a KQ flight to Dar es Salaam and back at $266 (Sh27,240), translating to a 30.5 per cent drop in fare prices.

Fastjet’s one way trip between Dar es Salaam and Nairobi costs Sh13,200. KQ has retained that at about Sh22,640.

Fastjet General Manager in East Africa Jimmy Kibati said their low-cost model, which has so far been successful in South Africa, Zambia, Uganda, Zimbabwe and Malawi, is made possible through outsourcing of support services.

He said that already their impact is getting felt on the Kenyan market, adding that beyond the competition, the airline is happy to bring about a new taste to consumers.

“The impact of Fastjet flights into Kenya has already been considerable, demonstrated by the fact that fares with competing airlines flying between the two countries suddenly dropped by as much as 40 per cent on the day that we announced that it would commence flights between Kenya and Tanzania,” said Kibati.

He listed the services as ground handling, engineering, booking agency and use of mobile money services as some of the fronts that help the airline to minimise operational costs.

Kibati also noted that the airline has departed from global distribution models that are synonymous with many airlines.

KQ, whose pricing model came under attack as part of the reason it was plunging into losses, now says that the extras that customers get were part of the reason it charges $266 (Sh27,208) to travel to Dar es Salaam.

In the advert, KQ lists extras such as refreshments, entertainment and carrying up to two bags as the rationale for charging higher cost for the one hour, 25 five minutes journey.

However, Fastjet says its model will give an opportunity for first-time flyers to use the flight.

Airline Certificate

In addition, the directors said that they hope to accommodate those customers who may not be interested in extras for the relatively short journey.

“Affordable air travel is key to growth of economies across Africa. We expect many of our passengers on our new Kenya flights to be first-time flyers who would otherwise not have been able to afford to travel by air,” noted Kibati.

The airline is buoyed by their survey that showed 30 per cent of its 1.8 million passengers for the last three years in various destinations within Tanzania have been first-time users.

On the luggage, Fastjet hopes to entice traders with its luggage upgrade option dubbed ‘Freighty’ that allows traders to purchase wholesale produce and transport it back to their home markets at a cost of $80 (Sh8,100) for up to 80kg.

And while KQ counts on its strong regional presence in the skies and the ability to make up to five different flights between Nairobi and Dar es Salaam due its high fleet number, Fastjet promises to increase its number of flights as the number of its customers rises.

The Kenyan affiliate of Fastjet is also set to launch operations within Kenya once it gets an Airline Operation Certificate (AOC).