New Low-Cost Airline in Africa

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After conquering the budget air travel market in Europe with EasyJet, entrepreneur Stelios Haji-Ioannou is looking toward Africa. His new airline, called FastJet, will be launched within the next four months in cooperation with African company Lonrho, which owns a budget airline called Fly540.

The new low-cost airline in Africa will begin operating in current the Fly540 networks in Ghana, Angola, Kenya and Tanzania, before expanding to other countries. Aside from their strong economic growth, these countries are attractive markets because have also made recent discoveries in oil and gas and are developing their energy sectors.

The new venture aims to bring the low-budget airline model, which has been successful in just about every other region in the world, to the millions of people in the expanding African middle classes. The goal is for the airline to carry some 12 million passengers per year and operate with approximately 40 aircraft.

There is tremendous potential for this new low-cost airline in Africa, a country characterized by densely populated cities separated by tremendous distances which include rough terrain and poor infrastructure, all of which make travel on land very difficult and time-consuming.

The market in Africa is vast and generally untapped, with demand for air travel estimated to increase by an annual average rate of 5.7% over the next 20 years, compared to a 4.8% increase in the world as a whole.

There will be many challenges ahead for FastJet, including overcoming regulatory hurdles related to transnational flights on the continent. Other barriers that need to be overcome include improving airport infrastructure and dealing with extremely high taxes, including duties on jet fuel.

However, the tremendous potential outweighs the potential drawbacks and could have a very positive impact on Africa by helping to democratize air travel through lower rates and increased competition. The ability for consumers who were previously unable to fly to access air travel will have a great impact in making it easier for people across the continent to connect and do business. This venture could therefore have a great economic impact for Africa as a whole, not only for its burgeoning airline industry.

– Caroline Poterio Martinez

Source: CNN
Photo: Connect Nigeria

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