Global airlines in fierce battle for Africa’s vast skies
Posted Tuesday, July 24 2012 at 01:00
The scramble for Africa’s airspace has intensified over the past three months as more airlines turn to the continent for a piece of the pie from the growing middle class and the high cash inflows from foreign investors.
This puts the national carrier, Kenya Airways, on a highly competitive path, forcing it to fight hard to retain its market share in a field where it has been a key operator.
Early in the month, South Africa Public Enterprises minister Malusi Gigaba told South Africa Airways (SAA), the state-owned airline, to roll out plans to start flights to every capital city in Africa and cut routes to other continents. This is the same strategy Kenya Airways is pursuing.
“SAA needs a new strategy and to prioritise flights to Africa,” said Mr Gigaba. “It needs a whole new re-think.
South Africa Airways is expected to add flights to Ivory Coast and the Democratic Republic of Congo in August and September, expanding to 26 African destinations.
It has already stopped flights between Cape Town and London as it competes with Virgin Atlantic and British Airways.
In February, the airline entered into talks with the Department of Public Enterprises and the National Treasury for funding of between 4 billion rand (about Sh42 billion) and 6 billion rand.
And around the same time, FastJet, an African discount airline startup backed by Stelios Haji-Ioannou — the name behind the successful Europe discount airline EasyJet — announced plans to revamp Fly540, adding 15 leased Airbus SAS aircraft within a year.
It will be launching flights to Ghana, Kenya, Tanzania and Angola.
“Launching FastJet with the Airbus A319 will offer unit costs low enough for us to cut fares and stimulate the market,” Rubicon chief executive officer Ed Winter said in an interview.
The initial five jets will double Fly540’s capacity to the equivalent of 1.5 million passengers a year within six months, Mr Winter said, with each aircraft potentially carrying upwards of 250,000 passengers.
Those in the know say that Fastjet aims to create a market using fares low enough to encourage many people to fly for the first time and others to travel more.
The airline was established after Rubicon bought Lonrho Aviation, which runs Fly540, in an $85.7 million all-stock reverse takeover which gave Lonrho a 73.7 per cent holding.
This will be the second low-cost carrier airline to operate in Africa, with EasyJet already connecting North Africa to Europe.
It is this success that Mr Stelios seeks to replicate south of the Sahara.
This complicates KQ’s Jambo Jet’s low cost airline strategy and the prospect of flying to every capital city on the continent by 2017.
Several competitors, who are also reducing their focus on other continents and shifting to Africa, are yet another headache for KQ — setting the stage for fierce competition and cheaper airfares.
The global rivals include Emirates, Etihad, Qatar Airways and Turkish Airlines. Last month, Korea Air launched direct flights to Nairobi in what is seen as a bid to gain from this lucrative route.