How to launch a low cost airline: look at what Fastjet does in Africa

EasyJet founder  Sir Stelios Haji-Ioannou’s plans to launch a low cost airline in Africa will take off later this month after plans were finalised to buy and develop Fly540 to become Fastjet.

Lonrho Aviation has agreed to sell Fly540 to investment company Rubicon Diversified Investments for $85.7 million, of which easyGroup will own 5%.

Ed Winter, former chief operating officer at easyJet, will head up Rubicon.

Winter says there are particular challenges in operating in Africa, including high fuel prices, passenger taxes, and some major cities don’t have airports. Fastjet is working with governments to try to overcome issues such as taxes. The carrier will initially operate where Fly540 operated, Kenya, Tanzania, Angola and Ghana. The airline will adhere to European safety standards.

The low cost carrier model, as it is known in Europe, will also have to change as internet access isn’t as widespread. In Europe the vast majority of low cost airline tickets are booked via the internet, however in parts of Fastjet’s Africa market, Winter said only one in five people have internet access. This means distribution through GDSs, over the counter ticket sales, distribution via travel agents and even ticket purchase via mobile phone, which is already done with Fly540.

Winter said: “Africa is crying out for a decent air travel network. The level of flying is way below anywhere else in the world.”

What do you think, has the firing pistol been shot for the start of Africa’s low cost airlines revolution?