Fly540

LCC start-up Fastjet targets under-served markets in West Africa, starting with Ghana

Sir Stelios Haji-Ioannou’s latest venture, start-up African LCC Fastjet.com, is preparing to launch operations later this year from a base in West Africa, mostly likely Accra in Ghana. The new carrier aims to introduce affordable air travel for Africans to facilitate inter-regional tourism and business travel. Accra Kotoka Airport, the only hub in the diverse and fast-growing Ghanaian market, is expected to handle over 10,000 passengers per day by 2030, making it one of the six largest airports in Africa.

Sir Stelios' easyGroup management team has been working on a feasibility study that is expected to recommend Fastjet.com connect six West African countries to Accra, with the possibility of expanding to 15 countries at a later date. According to reports in The Financial Times, Fastjet.com is considering leasing 15 aircraft and will launch operations within the new few months.

If successful in Ghana, Fastjet.com would like to expand across Africa and become the first pan-African carrier. Attempts by LCC Fly540, which now operates in three East African countries and plans to work with Fastjet.com in West Africa, to become pan-African have until now been stalled by external obstacles.

Increasing tourism, economic growth and oil make Uganda an attractive destination

It has been said that if Uganda’s infrastructure were to be improved, its resources could feed the entire African continent. Instead, the nation is one of the poorest and least developed countries in the world. However the potential for further development is undeniably present, and this is what has drawn large international airlines to enter the market. British Airways, Emirates, EgyptAir, KLM and South African Airways have been in the market for years, but it is the entry of Middle Eastern carriers such as Gulf Air and Qatar Airways in Oct-2011 through Dec-2011 that is boosting the nation’s aviation standing.

The country’s main international airport in Entebbe expects to break 1.5 million passengers in 2011 due to these services and is undergoing extensive improvement work to attract more carriers. The Ugandan Government approved the right for foreign investors to develop the airport, which will likely see a consortium of Middle Eastern developers take interest. The country’s designated national carrier, Air Uganda, is improving its offering as well, and is on course to launch domestic and more international services under its turnaround business plan.

Nigeria and Ghana driving West African aviation development

West Africa’s aviation industry is being led forward by Nigeria and Ghana. In Nigeria, the largest carrier, Arik Air, recently revealed itself as Boeing’s un-named B747-8 customer, while national carrier Air Nigeria is in the process of re-establishing its long-haul network. While the airlines are not without their problems, the market is growing and new entrants are appearing. In Ghana, the country is opening up to international carriers who are eager to increase their frequencies to the gold-producing country. Ghana itself is the site of one of Africa’s newest carrier, Starbow Airlines, and an impending base for pan-African LCC, Fly540.

Airbus predicted cities in these two countries, Accra and Lagos, will become “airline megacities” in the next 20 years, meaning they will handle 10,000 or more long-haul passengers a day. Accra and Lagos are two of just six** African cities tipped to become an “airline megacity”.

IATA notes speed bump in a gradual post recession traffic improvement

Air traffic growth softened in Jun-2011, under pressure from rising jet fuel prices and higher tax rates in some countries. However, the trend for passenger travel remains upwards, but at a slower pace than the post recession rebound, which was at an annual rate close to 10%, IATA noted.

Fly540 targets continued growth in under-served African market

Lonrho Group, which owns a 49% stake in Fly540, stated the African LCC is seeking to continue to expand in the underserved African market with the launch of the Angolan and Ghana units of the carrier and continued organic and aggressive growth in its home market, Kenya. Lonrho added that the Fly540 network is building towards carrying half a million passengers p/a with the carrier reporting revenues of GBP21.5 million in the 12 months ended Sep-2010.