Tanzania offers cockpit view into Africa's soaring low-cost airline industry

Jacopo Prisco and Earl Nurse, CNNUpdated 13th October 2015
(CNN) — With a rising demand for affordable travel options and an increasing reliance on air transportation, the low-cost airline model is starting to lift off in Africa.
FastJet, which operates out of Tanzania and is backed by the founder of EasyJet, is one of several budget carriers changing the current landscape, with no frills, one-way fares starting at around $20.
The airline started out in late 2012 after its acquisition of Fly540, a regional carrier which operated in Kenya, Sudan, Tanzania and Uganda.
Now, after transitioning away from most of its predecessor's routes, it offers flights to 10 destinations out of its base in Dar es Salaam, Tanzania's largest city.

One million passengers

The firm carried its 1 millionth passenger last December, its first profitable month.
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 Jimmy Kibati, general manager for Fastjet East Africa.
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"The market is over-regulated and there is not enough capacity. There are several large airlines within Africa, and they are placed in various different destinations, but then they don't transverse the continent effectively. So you find the airlines that are able to fly to these markets tend to be very expensive."
Airport infrastructure, high taxes and fuel duties are also a hindrance, as well as the fact a significant portion of customers do not have bank accounts, which encourages carriers to rely on alternative payment systems, chiefly via mobile devices.
On top of all that, according to Kibati, only 1 to 3 percent of Africans travel: "We focus a lot on first time travelers. The survey we carried out in December last year showed that 35% of our passengers were first time travelers."

A lift for the local economy

Tanzania is among the fastest growing markets for air travel in the continent.
"There's been a tremendous growth of aviation in our country," said Charles Chacha, director general of Tanzania Civil Aviation Authority.
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"If you take a few indicators, such as passenger volume, we have recorded an increase of almost 14% each year for the last 10 years. Now the passenger volume stands at 4.6 million passengers each year."
Additional services are starting to spawn around the burgeoning offers for airplane seats, such as Flyezee.com, a fare comparison website for East Africa.
"When we launched a year ago we started getting bookings almost instantly," Matthew Bell, co-founder Flyezee.com, told CNN.
"And, month on month, we saw between 20-40% growth, all the way for the first 6 months. The airline industries is a backbone to tourism and trade in a country, so this all stimulates growth in the economy."
Overall, the International Air Transport Association predicts that in the next two decades, Africa will be one of the fastest growing aviation regions in the world

Expansion plans

FastJet currently operates a fleet of three Airbus A319 aircraft, the same type used by EasyJet.
They are all on lease and have an average age of 12.7 years -- according to airfleets.net -- and were previously flying with South African Airways, EasyJet and Air Corsica.
Two additional planes will be put into service shortly, with the company saying it has already set aside funds to further increase the fleet.
On top of five destinations within Tanzania, FastJet currently offers flights to Uganda, Zimbabwe, South Africa and Malawi.
In the long term, Kibati says, the plan is to "cover the whole of Africa."
To find out more about low-cost air travel in Africa, watch the video below:
Africa's aviation is growing fast, but the cost of airfare is still an obstacle for many travelers. Find out how one airline is addressing the problem.
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