When easyJet’s founder started making rumblings about starting FastJet last year, I thought it was crazy. Back then, it was presumed that FastJet would compete with easyJet in Europe and that made no sense at all. Now, however, we know FastJet is meant to compete with … nothing. It will be mostly alone as an African low cost carrier. That sounds less crazy, but maybe only slightly so.
Why should I go into all the details of this venture when I can let a couple rich white guys in a room with dark wood paneling do it?
For those who didn’t bother sitting through the video, let me summarize. FastJet is not a startup airline in the regular sense. Instead, it will start using the platform of an existing airline that will disappear … Fly540. Fly540 likes to claim that it’s “Africa’s Low Cost Airline” on its website, but apparently that’s not working out so well.
The airline flies a mix of small airplanes – ATRs, Dash 8s, and 50-seat CRJs. Its big base is in Nairobi with a fair bit of flying in Tanzania next door. There are separate operations in Ghana in west Africa and Angola in southern Africa as well.
Now, the airline is going to morph into FastJet. From what I can tell, this basically means letting the people of easyGroup come in and buy bigger airplanes to replace the little ones buzzing around. That is so far the only real difference I can see.
The new airline will still fly from Kenya, Tanzania, Ghana, and Angola. I assume there will be an attempt to grow beyond that over time, but I haven’t really seen any other details at this point.
Dreaming of Low Cost Success in Africa
Is there room for a low cost carrier in Africa? Probably. It’s a big place and it’s not easy to get between big cities without flying. There are, however, very infrequent flights connecting these cities, and they aren’t cheap. There should be huge opportunity, right? Right. Theoretically.
There isn’t a ton of demand today, and maybe that just means that nobody has figured out the best way to stimulate it yet. Maybe FastJet will crack the code. That’s what Lonrho is hoping.
Today, Fly540 is owned by Lonrho Plc. From what I can tell, Lonrho is a mega-super-congolomerate that does a bunch of stuff all around Africa. It sounds like the airline side of the business isn’t doing well and Lonrho decided to get outside help.
So, it went to easyGroup and said “pretty, pretty please come and make this thing work.” And that’s where we are today.
Doing Business in Africa
Having a well established African company backing you is probably helpful. A lot of politics in Africa seems to be based on relationships. It’s not an easy place to do business, but Lonrho has made it work. So that’s a plus.
But airlines in Africa are notoriously losers. How many successful airlines do you know in Sub-Saharan Africa? You can probably count the number on one hand and most are in South Africa, a very different market from what FastJet is trying to tackle.
Does that mean that this is doomed to failure? I wouldn’t go quite that far. Maybe FastJet will be the one to really make a Pan-African low cost carrier work. I’m just not holding my breath, but I would love to be proven wrong.