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8 November 2012 | Anna Reynolds
Africa’s poor infrastructure and the population’s limited access to consumer credit could limit the impact of the launch of low-cost carrier FastJet, a travel expert has warned.
According to Tony Berry, industry affairs and airfare distribution director at business travel firm Hogg Robinson Group: “The low-cost carrier (LCC) market in Africa is massive. FastJet is emulating a tried and tested model; in many ways the theory is sound. However the issue Africa has is a lack of infrastructure. Getting from airport to airport is fine but if the trade zones are far away, buyers are relying on road, rail and other services which are limited in Africa. The timing of infrastructure is critical to the timing of the carrier.”
Speaking at the World Travel Market (WTM) event this week, FastJet CEO Ed Winter said: “There are groups of African countries trying to form trade areas but the lack of connectivity is letting them down.”
Rival airline Ethiopian Airlines remained sceptical FastJet’s European-based model would be a success. Speaking at the same event, Tweolde Gebremariam, CEO of Ethiopian Airlines, said: “It [FastJet] may work. The African air travel market is different from the EU and the US. There are culture issues and cross-border policy issues. The African market is very fragmented.”
Winter said FastJet viewed Africa’s fragmentation as an opportunity to tap into a growing business market which is “underserved” due to a lack of coordination between north and west Africa.
Berry added: “Despite the growth in Africa, it is not immune to fluctuations in the global economy, especially oil and aircraft prices. Flying in Africa is expensive and national carriers will move to protect their markets which may lead to lower fares, however the general population’s access to consumer credit will impact on the success of a LCC. As infrastructure improves, especially in West Africa, then airlines can begin to realise the potential.”
FastJet’s new airline will operate from four bases in Kenya, Tanzania, Ghana and Angola.