Loss-making Kenya Airways (KQ) will face more competition on its Nairobi to Dar es Salaam route as low-cost carrier Fastjet is set to launch Tanzania to Nairobi flights on Monday.
The AIM-listed airline, which is backed by EasyJet founder Sir Stelios Haji-Ioannou, announced it would fly daily from Dar es Salaam and Kilimanjaro to the Jomo Kenyatta International Airport (JKIA) in Nairobi.
“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 struggled last year as election-related uncertainty led to reduced demand for flights from Tanzania. However, the announcement of the Kenya route by the budget airline last December, increased its shares by 21 percent as shareholders welcomed the expansion. The company will hope that the expansion boosts 2016 revenues which was forecast to be lower than 2015 figures.
Fastjet is offering lower prices than Kenyan Airways and its Tanzania-registered subsidiary Precision Air. While Fastjet charges Sh27,390 ($268) for a return flight to Dar es Salaam and Sh20,790 ($204) to Kilimanjaro, Kenya Airways return-trip will cost a passenger travelling to Dar es Salaam Sh31,485 ($308). Precision Air is charging customers $442 for return flight from the JKIA to Dar es Salaam.
The budget airline is targeting first time flyers who have been forced to travel the long and difficult journey between Dar es Salaam and Nairobi due to high air fares.
FastJet chief executive Ed Winter said last year that the Kenyan expansion was an “important milestone”.
The carrier, which plans to buy new planes, raised £50 million ($73 million) in April from investors including Prudential’s M&G, J O Hambro Capital Management and Old Mutual to fund its expansion into other countries in Africa. The airline now serves Tanzania, South Africa, Zimbabwe, Zambia, Uganda, Malawi and Kenya. It plans to grow its fleet to 34 jets by the end of 2018.