Tanzania Daily News (Dar es Salaam)

11 December 2012

Tanzania: Mixed Feelings Greet Low Cost Airline Entry

Photo: Capital FM/File
Fastjet: Low cost Tanzania airline.

A WEEK after FastJet, the first real low cost carrier, started its operations in Tanzania's market, passengers and stakeholders have greeted the airline with mixed feelings on services being offered.

Many have hailed the airline for creating a new class of travellers, while others blame the firm for not telling them the truth on the fare and other charges. Some are asking FastJet authorities to add its list of local destinations apart from the Dar - Mwanza route.

They want the airline to consider Kilimanjaro - Mwanza, Arusha - Nairobi, Dar - Dodoma and even Dar - Tanga, which is impossible as the airport there lacks a tarmac runway. In their comments on the FastJet facebook, one realises that many people were still not aware of the operations and economics of low cost carriers. Mr Charles Omary Cazorla said he thanked the management.

But wanted to know Arusha - Nairobi fare. The airline answered via facebook, that he should continue watching the website for updates. Low cost airline is a new concept in the country unlike the traditional carriers. Therefore awareness is essential through various media houses.

The airline is trying to educate its clients via facebook and website but that is not enough as many, especially those who used to be bus and train travellers, do not posses Smartphones and internet access is a distant factor for them. Huawei Technologies officials say Smartphone penetration is still less than 15 per cent compared to mobile phone penetration figure of 70 per cent per year.

This is not a health figure for FastJet. Another, FastJet client Omari Killo asked the management to "explain fully" their costs because there are other hidden costs which are unexplained when buying a ticket until when one checks- in. But the airline explains all those costs at their website. It shows that despite some travellers to be accessing internet, they are lazy readers and this is a national problem.

According to FastJet website, passengers are subjected to part with 40,000/- for changing of departure date irrespective of how earlier one changes the itinerary. "In the event of cancellation FastJet will not compensate you or give a refund or a rebook on an alternative date without additional fees," the airline's info on website shows. Other charges include a 100 per cent penalty on no show and cancellation of the safari.

This means a passenger needs to repurchase a ticket once he or she delays to report at the airport. Mr Mallisa Heika commented on the FastJet facebook that in comparison to fares and services the airline is costly than Precision Air in regard to no-shows and rebooking, and luggage allowance. "These guys (FastJet) are expensive than our PW (Precision Air)...because when you don't show up a ticket is forfeited," Heika said.

According to the Tanzania Civil Aviation Authority (TCAA) Director General Fadhili Manongi the budget airlines are making their day by playing with volume of passengers due to low fixed costs per passenger, thus are able to charge reasonably low fares. "For low cost airlines, the yield per passenger is relatively low due to low fare, compared to traditional airlines which have high yield per passenger, due to high fares, but maximise revenues from large number of passengers handled," Mr Manongi said.

Further, services offered are different from the traditional ones and if they have to be offered, one has to pay for them, including baggage, food and refreshments on board. In the traditional business model, these costs are in-built in the fare structure. The economics behind the low costs carrier is to minimise costs which at the end of the day enable them to offer cheap fare.

This also has to be accompanied by volume of passengers. The airline started its operation in December which is high season through January. In February up to April, is the low season. At the low season, fares are likely to change much to the chagrin of passengers. Another FastJet facebook fan Sheila Kinanja said "honestly and truly I hate FastJet. Their system is not good at all compared to airlines like Precision Air and Air Tanzania.

They have a tendency of leaving passengers behind." she said. She also said in case of delay to report then one ha to buy a new ticket instead of rebooking on the next flight with minimum penalty. Tricey Steve said the advertising fare is not the same as the announced one or is there a tow fares for Dar es Salaam and Mwanza residents? There are also issues of reaching the customer's call centre as it is always engaged and when it is through nobody is there to pick up.

The airline said this was because of the overwhelming response from the customers. Mr Mike Marwa said: "I have been calling your customer care service nobody picked my phone, I also e-mailed you but no reply, please what is wrong, four days now since I e-mailed you".

A travel agent Shufaa Kiango said they are receiving no ticketing commission for booking FastJet passengers since the cut is almost the same as the fare the airline offers at 33,000/-. "We do not see how we can book these passengers. We are not ready to work for free while incurring costs for our perations," Ms Kiango said. The University of Dar es Salaam Senior Lecturer (Economics) Dr Haji Semboja said the fare offered by FastJet was too low and unrealistics for sustainable operations.

"I am not conversant with aviation business but the fares are too low to provide quality services...may be they are for promotional basis," Dr Semboja he said. On other hand, TCAA said there is nothing wrong with the new entrant in the local aviation industry, FastJet, charging low fares as their operation mode is quite different from traditional service providers, as the former capitalises on economies of scale, due to low costs per seat, as a result of high load factors.

TCAA boss said in that context the conventional airlines concentrate on high yield per passenger by offering deluxe services from checking in to take off to landing. "The good thing is that budget and traditional carriers will continue to operate on the same sky because their passengers differ on taste," Mr Manongi said.

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