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A one-size-fits-all, European-style, pan-African Low Cost Carrier (LCC) model does not work in Africa because of continued protectionism and regulatory constraints imposed by separate African states, says fastjet CEO, Nico Bezuidenhout.
He was speaking at the recent AviaDev Aviation Development Conference held in Cape Town.
“When you are dealing with 54 independent states and 54 different Air Operator Certificates (AOCs), the ambition to be a pan-African carrier is quite grandiose if you have a single cookie cutter-type of approach,” he said. Instead, fastjet was now acting as a regional feeder carrier, he said, “with the cost advantage of focusing on aircraft utilisation and people productivity”.
Bezuidenhout said that market access had been “one of [his] biggest challenges, frustrations and disappointments at fastjet”. “There needs to be more conviction, well beyond the Single African Air Transport Market (SAATM). There needs to be action towards a greater level of standardisation at civil aviation authority level,” he said.
His views were echoed during a panel discussion about the future of LCCs in Africa. Sylvain Bosc, fastjet Chief Commercial Officer, said the SAATM made no real impact on LCCs as it applied to intra-continental travel, while LCCs mainly served domestic markets. For intra-continental LCCs to have a future, more African countries needed to provide a level playing field with their state carriers, and stable economic environments conducive to private sector investment.
Girma Wake, former CEO of Ethiopian Airlines and former chairman of RwandAir, said LCCs in Africa operated in a high-cost environment, their costs being the same as those of legacy carriers, including a high fuel price and crippling airport taxes, which prevented proper LCC operations.
Gwenvael Ronsin-Hardy, Senior Project Manager of EGIS Airport Operation, advised African governments to incentivise LCCs. Africa World Airline Commercial Head, Richard Kyereh, suggested African governments and airports cut their aviation charges, while Ahmed Aly, CEO of Nile Air, pointed out that visa restrictions presented a major hurdle to LCC development in Africa.
For the next six months, fastjet will focus on cementing its position in Tanzania, Zimbabwe and Mozambique, migrating to a new distribution platform and introducing three more turbo-prop aircraft and new routes in Tanzania. Next, it will set its sights on West Africa. Each case would be on a country-by-country basis, depending on the market opportunity and the potential for collaboration with the national carrier. “It is a matter of ongoing dialogue and relationship building with each country and each government we engage with,” said Bezuidenhout.