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Fastjet entry stirs regional airspace

BUSINESS
By Patrick Alushula | January 11th 2016
FastJet enters Kenya

Fastjet is set to heat up competition with the troubled Kenya Airways as it makes its maiden touch down at Jomo Kenyatta International Airport (JKIA) this morning.

The London Stock Exchange-listed airline is introducing daily flights from Dar es Salaam and Kilimanjaro to the JKIA at prices that are relatively cheaper than KQ and Precision Air that currently serve the routes. Kenya Airways owns a 41.23 per cent stake in the Tanzanian registered Precision Air.

Fastjet will begin its daily flights from Dar es Salaam at 9.50am and land in Nairobi at 11.10am hoping to woo passengers with its low cost model that could determine who wins in the game of customer numbers.

Fastjet's Airbus A319 aircraft with 156-passenger capacity will then fly back to Julius Nyerere International Airport at 2.40pm for the one hour, 25 minutes journey.

With air travel being viewed as a preserve of the affluent, the budget airline will be hopping to tap into this with relatively cheap prices.

"Fastjet is delighted to announce that Fastjet Tanzania has been given clearance by the Kenyan government to operate flights between Kenya and Tanzania under the Bilateral Air Services Agreement between the two countries, as previously approved by the Tanzanian Government.

Two new routes, Dar es Salaam to Nairobi, and Kilimanjaro to Nairobi are on sale, with one way fares starting from as low as at $80 and $50 respectively, plus tax," said Fastjet CEO Ed Winter.

He said starting today (Monday), Fastjet Tanzania will operate a daily flight between Dar es Salaam and Nairobi and between Kilimanjaro and Nairobi. Flights between Zanzibar and Nairobi and Dar es Salaam and Mombasa are also expected to be added to the network later this year.

"To date, passenger traffic between the major cities of Dar es Salaam and Nairobi, which have a combined population of over 8 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. As has been the case with other routes that we have launched, we expect to stimulate the market," Ed said.

One way, passengers wishing to travel from Nairobi to Dar es Salaam on Friday 22, 2016 will pay about Sh13,200. It will cost them Sh9,900 to fly to Kilimanjaro.

A similar trip from Nairobi to Dar es Salaam would cost a passenger aboard Kenya Airways (KQ) Sh22,640, expensive by Sh9,440. To fly to Kilimanjaro, one has to part with Sh18,220, over 80 per cent higher than Fastjet's.

Using Precision Air, a trip from Nairobi to Dar es Saalam costs Sh27,206 ($266). A trip to Dar es Saalam on Friday 22, 2016 and back to Nairobi on Monday 25, 2016 using KQ will cost the customer Sh39,170. Precision Air will cost Sh45,208 ($442). If the same customer uses Fastjet, it will cost about Sh26,400.

Already, its low cost model has proved to be a game changer on other international destinations like Johannesburg, Lusaka, Entebbe, Harare and Lilongwe. The UK budget airline hopes to replicate this on the Dar es Salaam-Nairobi route.

The airline intends to use Fastjet Kenya, a separate company within Fastjet Group, which will begin operations once it gets an Air Operator Certificate (AOC). Already, it has been granted an air service licence by the Kenya Civil Aviation Authority, giving it a clear way to apply for AOC which, when received, will allow the airline to operate domestic flights within Kenya.

This may pose another competition to KQ especially because its ticket prices for domestic, regional and international routes remain high compared to its rivals such as Ethiopian Airlines and South African Airways. But KQ could count on its region brand and low accident history to shrug off the competition.

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