Bright future for low-carrier aviation business

27Jan 2016
Getrude Mbago
The Guardian
Bright future for low-carrier aviation business

The emergence of low-cost and regional airlines is leading to change the aviation industry outlook rapidly. There have been fluctuating fortunes in East Africa in recent times.

PREPARATION IN AVIATION BUSINESS

“Low cost carriers are the future of aviation industry. More of our people will be able to use air transport through the carriers than it was the case before,” one of the vision which Tanzania Airports Authority (TAA) Director General, late Engineer Suleiman Suleiman shared during the annual ordinary meeting for airport managers held in Dar es Salaam last year.

He said upgrading of existing airports and airstrips was high on plans by the Tanzania Airports Authority (TAA) towards attracting more airlines, particularly low cost carriers (LCC).

The DG noted that efforts were underway to attract more LCCs in Tanzania to ply both international and local routes, in a bid to increase the number of travelers using air transport.

“Low cost airlines like Fastjet have led to reduced prices in the aviation industry and as a result making the mode of transport suitable for majority of Tanzanians,” he said.

“Available data shows that 50 per cent of passengers using Fastjet are those who have never used air transport before. There are also new players such as Fly Dubai, who are operating international flights," the DG boasted.

He noted that TAA was also working with international route development companies to market Tanzania in the international arena with a view of attracting more airlines.

The concept of low-cost, no frills air travel that was hitherto unheard of in the region suddenly shook the local airwaves like a breath of fresh air. To the ‘un-schooled’ however, the low-cost perception meant cheap, low-quality and unreliable services-for in a country where air travel was only but a preserve for a chosen middle-class few, any notion of low-cost air travel could not resonate with the local ‘bourgeoisie’.

Suffice it to say, the self-proclaimed local aviation ‘pundits’ got it all wrong because with the entry of fastjet, Tanzania’s first low-cost carrier in the local aviation scene, the archaic and antiquated thinking from the doubters was blown out of the sky, so to speak!

Today, Fastjet has beaten all the odds and in a span of only three years, the budding, fast-growing premier low-cost carrier has not only ‘felled the giants’ but almost, in one great swoop started ruling Tanzanian and indeed the region’s clouds.

Low-cost, no frills carriers are the airlines with low operating cost structures than their competitors. Otherwise called budget or discount airlines, they however, maintain products usually associated with traditional mainline carriers with the only major difference being that they are bereft of the usual superfluities that are the hallmarks of conventional airlines.

Fastjet’s rapid growth, if looked at from the prevailing changing social-economic paradigms in the East African region, is a harbinger of a bright future for the airline. The airline’s durability and sustainability is even given more impetus by its uncanny ability of staying afloat even when the general business prospects look grim for the rest of the pack.

Fastjet’s General Manager, Jimmy Kibati, in a statement to the media recently, exuded confidence in the airline’s unfettered growth. “It’s mainly because of fastjet’s policy of listening to the demands of the customers”, he enthuses and adds that the fact that the airline has ‘democratised air travel as the people’s champion’ has been an additional rider to its dazzling fortunes.

The expansion has proven successful, even though it has come with some challenges “If you look at the access into various markets within Africa, travel is very restrictive,” said Kibati, general manager for Fastjet East Africa.

Fastjet today flies to almost all the major cities in Tanzania, departing from Dar es Salaam to Mwanza, Kilimanjaro, Mbeya and lately Zanzibar, the latter a coveted destination for tourists and holiday goers. Its regional and international destinations include Zambia, Zimbabwe, Uganda, Zambia, Malawi and South Africa.

The Zanzibar flights have been long overdue as Fastjet has been partnering with Coastal Air, a local charter airline to fly its customers to the archipelago. The arrangement has had its share of hiccups though, one being that the passengers had to leave their baggage behind to collect them later at the Nyerere International Airport in Dar es Salaam as the smaller charter could not carry heavy luggage. Moreover, these flights were only two times weekly. Now, with Fastjet, there will be daily return flights to the celebrated Spice Islands.

He said, “What’s more, paying less for flights means that holidaymakers now have the choice to perhaps upgrade their accommodation, or to take the whole family along instead of leaving the little ones at home with the grandparents.”

The Dar-Zanzibar flights, that will also be connecting to Johannesburg, South Africa, will commence on 11 January 2016. As Kibati sums up, passengers from South Africa who have always longed for a direct flight to Zanzibar are too bursting at the seams with excitement.

“Not only will Fastjet be offering its affordable but quality services to passengers to Zanzibar but it will also be a major boost to the growth of the Island’s economy”, Kibati sums up.

The booming tourism due to sustained and co-ordinated marketing as well as efforts to promote domestic attractions is some of the significant futures characterising the airline industry in Tanzania. The Business Monitor International (BMI) forecast show that the mining industry which contribute to the positive future of the airline sector will reach the value of 0.5 billion US dollars by 2013 contributing to around 1.5 per cent of the Nation Gross Domestic Product (GDP).

Also the increased Foreign Direct Investment flow, the regional integration that expands the market base and improvement of infrastructures currently in progress are indication of a bright and prospective future for the airline in the country. Consequently, a good number of airline companies have expressed interest to operate domestic flights in view of exploring new market opportunities.

Africa's aviation industry is growing at 4.7 percent, faster than any other region and passenger numbers are expected to double to 300 million in the next two decades, according to the International Air Transport Association (IATA).

Growth is, however, off a very low base and widespread expansion of low-cost aviation is hampered by government protectionism, high taxes and stringent regulation.