Low-Cost Airlines Confront National Carriers In Africa

Low-Cost Airlines Confront National Carriers In Africa

From Reuters Via Sunday Times

Before Fastjet launched low-cost flights between Harare and Dar es Salaam last year, Zimbabwean businessman Jonathan Jabangwe had to brave a hair-raising, three day bus journey to meet his clients in Tanzania.

Fastjet is among a wave of low-cost airlines launching or expanding operations in Africa as they seek to capture middle-income travellers who are tired of dangerous road journeys but cannot afford major international carriers.

The new airlines hope to undercut larger carriers by offering “no frills” services, replicating a model pioneered by European airlines like Easyjet and Ryanair.

Where low-cost routes have opened in Africa, prices have dropped by around 40 percent and passenger numbers have risen by almost half, a study by consultants Intervistas showed.

“It makes a big difference to me. The roads are very slow and you take your life into your own hands,” Jabangwe told Reuters as he queued to catch a flight from Johannesburg.

“Why aren’t these flights all over Africa? With the global economic situation, every dollar counts.”

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.

An “open skies” agreement, similar to the EU pact agreed in the 1990s that led to a boom in low-cost air travel, was signed 28 years ago but has never been properly implemented.

Low-cost airlines say governments block competitors from flying international routes to protect state-owned airlines like Kenya Airways, South African Airways (SAA) and Ethiopian Airlines.

African countries continue to champion national airlines, despite nearly all ventures resulting in losses or bankruptcy

Read more at Sunday Times