Aviadev Media

image

Exclusive. fastjet outline their ambitions to AviaDev

We are delighted that fastjet will be joining us in October for AviaDev, Africa's only forum dedicated to improving air connectivity to, from and within the African continent. The event will provide the toolkit required to be successful in a liberalised African air transport market and will facilitate formal one-to-one meetings between airports, airlines and industry suppliers. www.aviationdevelop.com

Ahead of the conference, we spoke to Sylvain Bosc, the Chief Commercial Officer about the airline's future plans:

JH: There has been a huge change in almost everything fastjet have done since Nico Bezuidenhout was appointed CEO and implemented the Stabilisation Plan and the financials are showing signs of recovery. Can you outline your fleet and network expansion plans over the next 12 months?

SB: You’re absolutely right, the Stabilisation Plan saw us leaving no stone unturned in the past few months in order to bring the airline back to financial stability, which we are on track to achieve by Q4 2017 as committed to our shareholders.

Over the next 12 months, we will prudently approach growth in our “historical” markets, Tanzania and Zimbabwe. In Tanzania we will deploy 2 Embraer E190 from October to offer more frequencies at the right gauge on all our routes; in Zimbabwe, we’re adding a second aircraft from July 31st and will be looking at up-gauging if market response continues to be as good as it is today. We will also investigate introducing more low-cost domestic services on turboprop aircraft if we obtain the necessary route rights.

In fact, there are many routes all over Africa that demand turboprops (either because of short runways or short flight time) to offer the lowest possible cost for everyone, which is a fundamental principle in the fastjet value proposition. We are currently looking at three new African countries in which we could allocate a combination of jets and turboprops, mostly on domestic services. We noticed that domestic traffic flows are much easier to stimulate through low fares than international ones.

JH: fastjet has moved from 156 seater A319’s to Embraer E190 and ERJ145’s with lower seating capacities. Some would argue you need a certain size of aircraft to make sufficient cost savings to be a truly low-cost airline. How would you respond to this?

SB: There is no denying that higher density aircraft reduces unit cost. This is simple maths of low-cost aviation. The true low-cost model also requires high aircraft utilization; so high utilization with high seat density means a substantial number of seats to sell, and that’s where it starts to challenge financial or commercial viability. Very few African city pairs have got large enough point to point traffic flows to sustain this type of seat supply, and price elasticity (the amount of traffic you stimulate for each price decrement) is not as high as the one we can count on in Europe or the US for example. Therefore, applying the “standard” low-cost model to Africa results in flying lots of empty seats around… a situation which investors will not appreciate very much!

We believe in a gradual approach to traffic flow building. We can start routes on ERJ145s, with a relatively low utilization in the beginning (given the low ownership cost of these units) and gradually increase frequencies as we manage to stimulate the market through affordable prices and most of all regular, dependable and on-time services. When we see that we have generated enough traffic to sustain higher gauge we can then move to bigger aircraft. One might argue that this strategy doesn’t enable us to benefit from economies of scale through fleet commonality, but we believe that a mismatch between supply and demand eventually costs much more than the savings that can be achieved through standardized fleet procurement.

JH: High levels of taxation, fuel prices, and airport charges have always been pointed to as barriers to operational success in Africa. Is this starting to change?

SB: It’s true that operating costs are sometimes staggeringly high in Africa and even if we are seeing some positive changes in this respect, it’s going to take a while before those costs normalize. Yet those adverse conditions are the same for all operators, so it doesn’t change the validity or efficacy of our business model; it is surely challenging if at all possible, to offer the same product and price that operators such as easyJet or JetBlue propose in mature, competitive markets. But we are still able to achieve significantly lower costs - and therefore fares - and greater convenience than existing full-service African competitors, and that’s what counts.

JH: Finally, how much difference would a liberalised air transport market in Africa make to your business and do you think this will ever become a reality?

SB: People have been talking about the liberalization of air transport in Africa for decades. There are two options. One can either lament about its slow progress, to little effect, or, work within current constraints and still achieve benefits for the travelling public in those markets where a level playing field is more or less in place. We’ve chosen the latter. Africa is a huge continent with a vast mosaic of different situations and circumstances in each of its markets; it will not liberalize at once nor overnight and we’ve built this reality into our business model already.

Press Releases

DateSubject 
30 May 2018 AviaDev comes to Europe
19 Jun 2017 AviaDev Africa Will Challenge the Status Quo
07 Sep 2016 Rezidor’s CEO hails inaugural AviaDev conference that will discuss issues facing travel in Africa
12 Jul 2016 NEWS RELEASE: AHIF to probe crucial issues for hotel investment in Africa -Raising capital l Africa as an investment destination l Infrastructure l Political and security risk
11 Jul 2016 State of hotel investment in Africa: headwinds and opportunities
11 Jul 2016 JLL appoints investment banking expert Philip Ward as EMEA CEO of its Hotels & Hospitality Group
11 Jul 2016 CityBlue Hotels Appoints Vernon Page as COO
11 Jul 2016 CityBlue Hotels to Open Property in Bujumbura, Burundi
11 Jul 2016 HOTELIER PROGRAM 1000 ROOMS IN TOGO
11 Jul 2016 Starwood set to debut Four Points by Sheraton brand in Tanzania with two hotel signings
11 Jul 2016 Carlson Rezidor announces its 3rd hotel in Mauritius
11 Jul 2016 Carlson Rezidor continues to lead Africa’s hotel pipeline
11 Jul 2016 Carlson Rezidor launches Quorvus Collection in Africa welcoming The Emerald Grand Hotel & Spa, Lagos
11 Jul 2016 Carlson Rezidor enters Zimbabwe with Radisson
13 Jun 2016 Africa Hotel Investment - Cairo and Cape Town on Top
03 Jun 2016 AHIF: Togo sets pace for new era of growth
10 May 2016 Ibis Styles is number one brand for planned hotels in Africa
05 May 2016 Summer flight bookings to Africa - 6% ahead of last year
28 Apr 2016 YCI to Partner with Bench Events to Bolster Ambitious Growth Plans
25 Apr 2016 So how much does it cost to build a hotel in Africa? New report sheds light on cost per key across the regions...
11 Apr 2016 Hotel development in Africa jumps 30% to 64,000 rooms
29 Mar 2016 New dates for AHIF in Togo: 21-22 June
17 Feb 2016 Togo’s Prime Minister Will Attend AHIF
03 Feb 2016 AviaDev Africa - Ready For Take-off - Unique opportunity to connect aviation and hotel sectors
14 Jan 2016 Togo To Host Additional AHIF in 2016
17 Nov 2015 Hotel development on the horizon for Cameroon
01 Oct 2015 Revealed – The Top Ten Hotel Investment Opportunities in Africa
01 Oct 2015 Mövenpick Hotels & Resorts to debut in East Africa with upscale Kenya property.
01 Oct 2015 Mövenpick Hotels & Resorts to open first Cote d’Ivoire property in 2018.
01 Oct 2015 Mövenpick Hotels & Resorts steps up African expansion campaign with three new Sub-Saharan properties.
01 Oct 2015 Hotel Real Estate Sector in Africa Set for Strong Growth
30 Sep 2015 Marriott International Opens First Marriott Executive Apartments Property In Africa
30 Sep 2015 Mövenpick Hotels & Resorts inks landmark deal for its first property in dynamic Nigeria.
30 Sep 2015 Starwood Hotels & Resorts Accelerates Growth In Africa And Indian Ocean With Seven New Deals
30 Sep 2015 Carlson Rezidor further expands its strong presence in Africa
30 Sep 2015 Hilton Worldwide Announces Agreement for Hilton Awassa Resort & Spa, Ethiopia
28 Sep 2015 Outlook bright for African hotels as steady growth gets underway
14 Sep 2015 Travel to Lagos Bounces Back
04 Sep 2015 Africa’s Highest Hotel Price Point is Addis
27 Aug 2015 International Hoteliers Bet on Lagos
30 Jul 2015 Doing business in Africa - The challenges and opportunities
08 Jul 2015 Rwanda to host Africa Hotel Investment Forum in 2016
25 Jun 2015 Hilton Heads Hotel Development Boom in Africa
24 Jun 2015 Hilton Heads Hotel Development Boom in Africa
03 Jun 2015 Hotel Development in Africa Accelerates to 50,000 Rooms
11 May 2015 Hotel Industry Leaders Highlight Ten Priorities for Growth in Africa
03 Feb 2015 Government and Industry Leaders Express High Expectations of Hotel Investment Forum
03 Feb 2015 Brian Nourollahi appointed GM to manage the first Marriott branded Hotel in Sub Saharan Africa
11 Jan 2015 AHIF returns to Addis for 2015
02 Oct 2014 New Signings and Modular Room See Hilton Worldwide Set the Pace in Africa
01 Oct 2014 Best Western International Inc., announces BEST WESTERN PLUS Abyssinia and BEST WESTERN Noah Hotels in Addis Ababa, Ethiopia
30 Sep 2014 Accor, leading player in Africa, carries on its development on the continent.
30 Sep 2014 Mangalis Unveils New Hospitality Solutions for the Fast Growing African Market and Beyond
30 Sep 2014 Jumeirah Group appoints Aboudi Asali to head MEASA Development Team
30 Sep 2014 Marriott International's Commitment to Expansion Across Africa Gathers Momentum
30 Sep 2014 IHG Expands in Africa with First Hotel in Ethiopia
30 Sep 2014 Worldhotels Enters into Sub-Saharan Africa
02 Sep 2014 Ethiopia – a Destination Crying Out for New Hotels
23 Jul 2014 Business Leaders Share Tips for Doing Business in Africa
02 Jul 2014 AHIF Programme Is Reaching New Heights
02 Jun 2014 Africa Hotel Investment Forum 2014 (AHIF) moves to Addis Ababa
14 May 2014 Carlson Rezidor Leads the Race to Build Hotels in Africa
15 Apr 2014 Hotel Development Pipeline in Sub-Saharan Africa Overtakes the North
03 Mar 2014 Hotel Partners Africa Launches Recruitment Service
27 Feb 2014 Hotel Sector Set to Create 320,000 New Jobs in Africa
25 Feb 2014 AHIF Returns to Nairobi
01 Oct 2013 African hospitality group Mangalis to invest €315m developing hotels in Africa
28 Sep 2013 Kempinski Hotels focuses portfolio expansion on Africa
25 Sep 2013 Hotel Industry Takes a Stand Against Poaching
24 Sep 2013 Travel & Tourism drives peace in the war against terrorism
23 Sep 2013 Nairobi Hotel Conference Proceeds as Planned
17 Sep 2013 Business Leaders Tweet the Secrets of their Success
13 Sep 2013 New African Hospitality Group to be Unveiled at AHIF
02 Sep 2013 Africa is a Giant Complex Game of Monopoly
30 Jul 2013 Latest Research Reveals Promising Future for Africa Despite Challenges
17 Jul 2013 Phyllis Kandie Becomes Patron of AHIF
07 May 2013 International Hotel Industry Welcomes New Kenyan Administration
20 Feb 2013 AHIF Returns to Kenya
09 Jan 2013 Investor Confidence High Following AHIF
04 Sep 2012 Oxford Professor Identifies Africa as a New Investment Hot Spot
20 Aug 2012 AHIF Will Confront Difficult Issues
09 Aug 2012 What Does It Take To Do a Hotel Deal in Africa?
23 Jul 2012 Why the Smart Money’s on Hotels in Africa
28 Jun 2012 How to Make It in the Hotel Business: AHIF Programme Launched
17 May 2012 In Sub Saharan Africa - Hotel Development Takes Off
14 Apr 2012 New Minister Becomes Patron of the Africa Hotel Investment Forum
29 Mar 2012 Hoteliers Bet on Booming Africa
10 Feb 2012 Kenya Lures Africa Hotel Investment Forum to Nairobi
22 Nov 2011 Bench Events Announces the Africa Hotel Investment Forum (AHIF)