Competition hots up for KQ as Fastjet enters Nairobi

Low-cost carrier Fastjet is set to launch Tanzania to Nairobi flights on Monday, stepping up competition for Kenya Airways (KQ) and its associate Precision Air which also fly the same routes.

The UK budget airline has announced daily flights from Dar es Salaam and Kilimanjaro to the Jomo Kenyatta International Airport (JKIA) at prices that are relatively cheaper than the two main carriers currently flying these destinations.

Kenya Airways owns a 41.23 per cent stake of the Tanzanian registered Precision Air.

“Fastjet Tanzania has been given clearance by the Kenyan government to operate flights between Kenya and Tanzania under the Bilateral Air Services Agreement between the two countries,” the airline said in a statement.

“Return flights from Nairobi’s JKIA to Dar es Salaam’s Julius Nyerere International Airport and Kilimanjaro International Airport will initially operate daily, using Fastjet’s Airbus A319 aircraft with 156-passenger capacity.”

Fastjet, which last April raised Sh7.5 billion to fund its penetration of the African market, operates a budget model where passengers who make advance bookings pay less.

Passengers who want extras like food, baggage and seat choices pay extra, making it cheaper to fly for those seeking minimal additions.

The London Stock Exchange-listed carrier has been using this model in its flights to South Africa, Uganda, Zambia, Malawi and Zimbabwe.
Its plan to introduce it locally could shift market dynamics on the Tanzanian route.

A fare comparison shows that Fastjet is charging Sh27,390 for a return flight (departure on January 18 and return on January 22) to Dar es Salaam and Sh20,790 to Kilimanjaro.

Passengers are charged between Sh220 and Sh2,200 for a pre-assigned seat, Sh1,650 for checked-in luggage of up to 20 kilogrammes and Sh3,000 for food and drinks ordered during the flight.

A Kenya Airways return-trip on the same dates will cost a passenger travelling to Dar es Salaam Sh31,485 and Sh430 more for a similar flight to Kilimanjaro.

READ: Kenya Airways defends air ticket pricing against rivals

Kenya Airways, which is facing increased pressure from gulf airlines on its African routes operates 42 flights per week to Tanzania.

Precision Air which has similarly been financially shaky, is charging customers $442 (Sh45,084) for return flight from the JKIA to Dar es Salaam and $303 (Sh30,906) to Kilimanjaro on the same dates.

“The travelling public pays prohibitively high fares for regional air travel,” said Jimmy Kibati, Fastjet general manager for East Africa, adding that their target will be first time flyers who normally use buses.

“The lack of competition on many routes maintains prices artificially high, keeping air travel beyond the reach of most. Affordable fares will make it easier for more entrepreneurs, tourists and other visitors to travel between Tanzania and Kenya,” he said.

Mr Kibati added that Fastjet’s entry into the Kenyan market will have the net result of bringing prices down as regular and budget airlines compete for passengers.

Fastjet is pursuing a continent-wide expansion plan, seeking to replicate the success of the Tanzanian operation to several other countries. Its local subsidiary, Fastjet Kenya, has until recently faced challenges in making its entry into the local market.

The Kenya Civil Aviation Authority (KCAA) deferred granting it any licence for nearly a year after existing carriers, including KQ, voiced their objections to the move.