Kenya Airways will launch its low-cost subsidiary JamboJet on April 1 with fares of less than Sh3,000 one-way in what is set to revolutionise air travel.
The budget airline will initially launch on Kisumu, Eldoret and Mombasa routes from Nairobi before venturing to Bujumbura, Kigali, Juba, Goma, Mwanza, Zanzibar, Kilimanjaro and Addis Ababa in year’s time.
The Sh3,000 fare, which includes taxes, will help the national carrier lure travellers from road as well as ward off competition from budget operators such as Fly540.
JamboJet flights will come with fewer comforts found on international airlines and passengers could be asked to pay for extras like food and baggage.
“It’s especially meant for people who do not fly often,” JamboJet CEO Willem Alexander Hondius told the Business Daily in an interview last week.
“We would like to be a champion of the people by making it affordable for a big group of people to travel more. We think 30 to 40 per cent will be people who have not travelled before,” added Mr Hondius whom KQ tapped in September from KLM, which owns 26 per cent of the Nairobi Securities Exchange-listed carrier.
The Sh6,000 return ticket from Nairobi to Mombasa offered by JamboJet is 65 per cent lower compared to the Sh16,530 that its parent company, KQ, charges on the route.
Rival Fly 540 charges Sh17,200 on the same route where fares on premium buses can go can go up to Sh4,000.
A growing middle class in Kenya and tourists have increased demand for air services as more and more people fly to holiday destinations at the Coast or to western in towns like Kisumu and Eldoret.
JamboJet begins selling tickets on February 27.
“Our aim is not to steal a lot of passengers from KQ, of course we will cannibalise, and we cannot avoid that. The aim of the game is to grow the pie and add new passengers on board and we are sure that it will work,” said Mr Hondius.
The low JamboJet fares will cater for basics including a single hand luggage and random seat selection.
Passengers will have to pay for refreshment on board and part with Sh500 to check in a suitcase and up to Sh860 to get a preferred select a seat.
Its leaner cost structure will see the budget airline go big on outsourcing as well lean on KQ for non-core functions like maintenance, ground handling, human resources and sales offices.
JamboJet will directly employ 24 people with the rest of the 30 crew members being sourced from a third party and 20 pilots hired through KQ. The national carrier will earn a fee from the subsidiary.
“I pay them (KQ) for the services so I operate cheap. They are a supplier and we are the customers. And we keep the money within the group which is nice,” said Mr Hondius.
“We have to keep the organisation as lean and mean as possible. I will not hire those cabin attendants myself; they are not on JamboJet pay roll. We hire them through a third party but fly with us. This will keep the cost down.”
JamboJet will operate two Boeing B737s with a capacity of about 142 passengers in a single class, allowing the budget carrier to keep the cost per seat lower given KQ carries 116 passengers on the same plane, but on two classes.
This business model will help KQ tap the rising passenger numbers within the region and match competition from budget operators, especially from European carriers eyeing Africa.
Jambojet is looking to compete with Fastjet, which is modelled around Easyjet, the second largest low-cost carrier in the UK after Ryanair.
Fastjet last year received approval to launch international flights to South Africa, Zambia and Rwanda from its hub in Tanzania and has ambitions for Kenya flights.
The budget carrier is a U-turn for KQ, which merged its former low-priced unit Flamingo Airlines with its group operations in 2004.
Kenya Airway’s quest for a budget airline is part of a global trend where international carriers are forming subsidiaries to handle local routes.
The national carrier hopes the budget arm will quicken the firm’s recovery after it swung back to a Sh384 million profit in the six months to September compared to a loss of Sh4.78 billion the prior year.