Some start-up airlines in Africa look promising

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Last week we offered up Shakeel Adam’s thoughts on some newly announced start-up airlines in the Americas. As managing director at AVIADO Partners Consulting, Adam has guided many would-be airlines through the months and sometimes years of strategy development, aircraft selection, network organization and financial analysis that comprise the numerous travails of a start-up endeavor.

This week, with Adam’s help, RGN brings you an overview of – and some candid opinions on – a selection of airlines that are ‘incubating’ in Africa.

Goldstar Airlines Ghana pushed back its June launch date, but we will forgive them because their proposed long-haul operation might actually work. Sources report that the start-up has obtained an MD-11 and a Boeing 747 aircraft, which are intended to connect Accra to destinations such as Baltimore Thurgood Marshall, London Gatwick and Guangzhou Baiyun in China.

“It’s an interesting airline to watch because the market is very robust and growing,” Adam points out. “For the last three or four years there has been a lot of interest in Ghana as the next best place to start an airline. Ghana is the shining star of stability in West Africa. They have population growth, development of wealth and the lifestyle market is growing… but there is not enough reliable supply. Goldstar Airlines has managed to secure some interesting routes, so we will have to watch and see.”

Former South African Airways executives Siza Mzimela, Theunis Potgieter and Jerome Simelane are at the helm of a new consultancy firm driving a South African Start-up called Fly Blue Crane. Aiming to set up shop at Johannesburg O.R. Tambo Airport and connect underserved regional routes, the three entrepreneurs are poised to compete with a number of airlines in the area, including their former employer.

“South Africa is an extremely difficult place to launch an airline successfully,” says Adam. “On one hand the market needs an airline with good, reliable services, but at the same time there is overcapacity because the current setups are inefficient and fragmented. There is opportunity for new entrants in South Africa, but there are also many carriers crowding the market and doing a bad job. Will [Fly Blue Crane] be successful or not? It’s too early to say.”

Kenya is one of several east-African nations showing positive economic development. In fact, Kenya is considered by many to be the region’s “economic anchor”. Jambojet, pictured above, is a colorful Kenyan LCC start-up that has already beaten the odds by reaching first flight on April first. Though it is actually a subsidiary of Kenya Airways, Jambojet is maintaining a fully independent corporate identity from its full-service parent; a smart move according to Adam.

Headed up by seasoned industry executives including Transavia chairman Mattijs ten Brink and Willem Hondius, former EVP and COO at Travsavia and ex-managing director Eastern Africa for KLM, the project is also supported by Kenyan businessman Ayisi Makatiani who has been called the most respected CEO in Africa. The airline is operating three 737-300s on point-to-point domestic routes at prices comparable to the long and uncomfortable bus journey that locals would otherwise rely on.

“Jambojet is targeting the price-sensitive segment of the market,” Adam says. “As long as Kenya Airways group keeps an arm’s length distance and allows it be run independently as a pure low cost, I think this is one of the potential success stories. You definitely don’t want to bring a heavy full-service airline complexity to this venture.”

Jambojet has now forged a partnership with Safaricom, Kenya’s largest communications services provider. This move positions the airline to handle larger call volumes and tickets sales. If the airline manages to stick around for a while, and most importantly manages to not cannibalize Kenya Airways’ business, Jambojet and Kenya Airways could become the first global example of an LCC and its mainliner parent coexisting in harmony.

 

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