LOW-COST CARRIER FASTJET EXITS KENYA AFTER 11 MONTHS

Low cost carrier Fastjet has exited the Kenyan market after just 11 months of operation on low demand.

The UK budget airline will from Monday also suspend Dar es Salaam-Entebbe flights as well as between Victoria Falls in Zimbabwe and Johannesburg in South Africa for similar financial reasons.

Fastjet launched daily flights from Dar es Salaam and Kilimanjaro to the Jomo Kenyatta International Airport in Nairobi on January 11 at prices relatively lower than those offered by Kenya Airways and its associate Precision Air.

The budget carrier has faced a hard time on its Kenya routes and was soon after launch forced to end Kilimanjaro flights and reduce the Dar es Salaam ones to twice a week.

“After careful consideration of all possible options, Fastjet has regrettably made the difficult decision that a small number of route suspensions still needed to be effected,” Fastjet said in a statement.

“The specific routes to be suspended were chosen due to low passenger demand, as well as inefficient utilisation of Fastjet’s existing and planned aircraft fleet. They were not commercially viable in the present economic environments of both Tanzania and Zimbabwe.”

The carrier’s route network will now comprise of domestic Tanzanian routes between Dar es Salaam and Mwanza, Kilimanjaro, Mbeya and Zanzibar.

Its international routes will be between Tanzania and Johannesburg, Lusaka and Harare as well as two routes from its Zimbabwe base in Harare to Victoria Falls and Johannesburg.

Service frequency between Harare, Zimbabwe and Johannesburg, South Africa, has been increased.

“The remaining routes within Zimbabwe and Tanzania, and between these countries and South Africa, are all projected to positively contribute to fixed cost during December 2016 and will continue to be closely monitored thereafter,” the carrier said.

Fastjet operates a budget model where passengers who make advance bookings pay less.

Passengers who want additional services such as food, baggage and seat choices pay extra, making it cheaper to fly for those seeking minimal additions.

The airline and Kenya Airways have been battling for passengers on some of the Kenya-Tanzania routes, leading to fierce price war, which even caught the attention of the Kenya Civil Aviation Authority.

The industry regulator cautioned the two airlines against running advertisements of their tickets which were exclusive of extra charge in attempt to show that they are the cheaper option.

Fastjet in April 2015 raised Sh7.5 billion to fund its penetration of the African market, money it intends to fund its expansion and entry into markets such as Rwanda, eastern DR Congo and South Sudan.

The carrier was keen on pursuing a continent-wide expansion plan, seeking to replicate the success of the Tanzania operation to several other countries with its no-frills model.

Fastjet has, however, struggled to execute this strategy, forcing key shareholders such as Stelios Haji-Ioannou, who owns 12 per cent of the airline, to call for management changes.

He particularly wanted the firm’s chief executive Ed Winter to resign, accusing him of mismanaging the company. Mr Winter resigned in June and was replaced by Nico Bezuidenhout.

The new CEO’s turnaround plan includes a review of the Fastjet fleet, both the size and type of aircraft operated, the frequency of flights on specific routes, as well as the actual routes flown.