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The battle lines are already drawn in the aviation industry in Kenya with entry of wholly owned subsidiary of Fastjet Plc of UK

The entry of Fastjet airline into the Kenyan airways marks unprecedented battle for dominance between the low-cost Pan-African operator and existing airlines ruling the market. The airline is a subsidiary of the London Stock Exchange quoted fastjet Plc under Alternative Investment Market (AIM) segment.

On 11th January, 2015 the airline declared an official launch of its flights between Jomo Kenyatta International Airport (JKIA), Nairobi and Dar es Salaam and Kilimanjaro. Fastjet was given clearance by the Kenyan government in December to operate flights between Kenya and Tanzania under the Bilateral Air Services Agreement between the two countries. During the occasion, Fastjet general manager for East Africa, Jimmy Kibati, said that the airline's strategy was targeted first-time flyers who use road transport to connect to these destinations.The airline plans to also expand its destinations to include domestic flights within Kenya as stated by the GM, "Flights between Zanzibar and Nairobi and Dar es Salaam and Mombasa are also expected to be added to the network later in 2016."

Announcing the launch, Mr. Kibati said the airline will charge inclusive of taxes Kes. 13,200 for one way flight to Dar es Salaam and Kes. 9,900 to Kilimanjaro.

Fastjet has been flying internationally through its subsidiaries in South Africa, Zambia, Uganda, Zimbabwe and Malawi. The airline has been on an expansion plan implementation as announced in their investor advice last year. The company also says it's in the final stage of the getting AOC license in Zambia early 2016.The airline started its operations in Tanzania in November 2012, and Zimbabwe in October 2015. The company says it will employ its fleet of Airbus A319s to achieve its long-term strategy of becoming the continent's first low-cost, pan-African airline.

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).
Read more at: http://www.standardmedia.co.ke/business/article/2000187785/fastjet-entry-sparks-price-war-on-nairobi-dar-es-salaam-route

The move to expand into African air space is seen as a move to gain in the increasing business in the continent. According to the airline's website, the choice of JKIA and Dar Airport was because of the importance of the two destinations. The site states “Nairobi and Dar es Salaam are not only key travel destinations, and two of the busiest airports in the region, but also hubs with extensive regional and international networks.  Expanding the network into Kenya marks an important milestone in fastjet’s strategic development and is a significant achievement for the Company, its staff and shareholders.” However this action has not been easy sail considering the recent volatility of the local currency to the US dollar as well as general economic environment decline.

In a statement to stakeholders in 2015, Fastjet Plc stated "fastjet is proactively taking steps to manage its operating costs and overheads, and fully align its growth strategy with demand. As such, despite the current challenging market conditions and currency headwinds, which are expected to lead to lower than anticipated revenues in 2015 and 2016, the Company remains confident that these actions will ensure it continues to be well placed to capture the significant growth potential in the African aviation market. The Board believes 2016 will be a year of network growth and that the Group is expected to be cash flow positive for the next financial year." This points into the direction the company is forging in achieving its strategic plan.

As the dust settles here in Kenya, the airline industry is faced with a grueling battle of price as already marked by the slight adjustment of prices by airlines operating on the same routes as Fastjet. This will be more fierce as the airline is set to get an AOC license to operate in the domestic flights in Kenya. Travelers will benefit greatly from this war of prices between main providers Kenya Airways (KQ) and Fly540. Fly540 is headquartered in Nairobi and operates from Jomo Kenyatta International and Wilson Airports, Fly540 Kenya flies to Eldoret, Kisumu, Lamu, Lodwar, Malindi, Mombasa and across the border to Juba and Zanzibar.

 

 

Last modified on Monday, 14 March 2016

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