in Air Transport / Features

Jambo makes a Dash for expansion

Posted 8 December 2017 · Add Comment

As low-cost carriers develop across Africa, Githae Mwaniki talks to Jambojet CEO, Willem Hondius, about the airline's operation plan in Kenya and the East African region.

Jambojet has been on an expansion drive recently, witnessed by the delivery of a new Bombardier Dash 8 Q-400 Turboprop airliner.
The aircraft’s arrival has been key to the company’s fleet reorganisation programme, which enables it to serve more destinations using airports/airstrips with short runways.
Earlier this year, the airline celebrated flying its millionth passenger.
It has also turned a profit for the second successive year, seemingly able to steer its own path and not be affected by the operational challenges faced by its parent airline, Kenya Airways (KQ).
Now Jambojet is set to begin operations to reach more destinations within Eastern Africa, so what’s the basis for its operational strategy?
“We operate the so called low-cost model, which was introduced elsewhere in the world a long time ago,” explained Jambojet CEO Willem Hondius.
“This allows us to introduce low fares, which can’t be matched by existing operators. These attract new customers, who didn’t fly before, and existing travellers, who fly more often. You grow the market rather than redividing it.
“In Europe, the market on routes where low-cost airlines (LCCs) operate tripled or even quadrupled. The share of LCCs in intra-Europe traffic is now about 45%. The market in Kenya grew by 35% since Jambojet started. Although the group of people who can afford to fly is growing, the absolute number is still low compared to Europe and the US.”
Looking at the driving factors behind the airline’s fleet choice, Hondius explained: “The most important factor is the cost per seat. Most LCCs operate the Boeing B737 (300, 700, 800) or the Airbus A319/A320 as these aircraft give the best market demand/seat cost ratio. Normally you operate only one type of aircraft in order to keep the cost down. With one type you only need to train pilots for that type, you only have to do maintenance and have spare parts for one type etc.
“We started with only Boeing 737-300 (142 seats) aircraft, leased from Kenya Airways, our parent company. However, we noticed that this aircraft was too big for most of the domestic routes in terms of demand and in terms of airport infrastructure (short runways). Therefore, we introduced the Bombardier Dash 8-Q400 NG (78 seats) turboprop aircraft. We now operate two Q400s and will add another two by the end of the year.”
Jambojet is now planning to operate additional destinations.
“We now operate to six domestic destinations – Mombasa, Ukunda, Malindi, Lamu, Eldoret and Kisumu,” said the CEO. “Recently we received permission to operate to destinations outside Kenya. We will introduce international routes by the end of this year, when we receive the additional aircraft.
But how will that affect the relationship with KQ?
“We already market Jambojet separate from KQ. We have our own brand, different distribution (more than 60% via the internet), a different pricing model, with much lower one-way fares etc.”
Turning to other market opportunities Hondius added: “There are currently no other real low-cost carriers in Kenya. The existing carriers might have lower cost that the mainstream carriers, but they are not true low-cost. In East Africa, we only have Fastjet operating in Tanzania, but they have reduced their network and number of aircraft.
“In this region, you have two bigger network carriers – Ethiopian Airlines (ET) and KQ. ET is profitable and KQ is on its way back. Other national carriers are RwandAir and Air Tanzania (which recently resumed operations). All other carriers are smaller domestic/regional operators.
“Competition is strong, especially from the Middle East and European carriers, which puts pressure on the prices. The cost of operating is also quite high in Africa, which makes it more difficult to compete on price.”
Jambojet’s rise to prominence has been quick – a point acknowledged by the CEO.
“The Jambojet business plan was approved by the KQ board in September 2013 and we started to operate in April 2014,” he said.
“The first year we only operated to Kisumu, Eldoret and Mombasa. Then, in the second year, we introduced the Dash Q-400 and added Lamu, Malindi and Ukunda to the network.
“In the beginning, the Kenyans had to get used to the low-cost model but we see that now most people understand how it works and are happy with the affordable fares Jambojet offers. In our first year of operation about 30% of our passengers had never flown before. We are still welcoming a considerable number of passengers who are flying for the first time. Overall I think that we are quite successful with this low-cost model.”
Jambojet is currently 100% owned by KQ and Hondius said there were no plans for this to change.
But will the fact that a legacy carrier owns the airline restrict its growth – particularly as in other markets LCCs in this position tend not to grow beyond a certain point (regional/intercontinental)?
“In Africa, it is a big advantage to be part of the national (legacy) carrier,” said Hondius. “We introduced Jambojet to complement KQ in a market segment it didn’t cover. Being part of the KQ group means that we have to grow in a smart way. We are not there to compete with KQ, but you can never avoid that passengers switch from it to Jambojet.
“In the airline business 5-10 years ahead is difficult to predict. Jambojet will grow steadily with the expectation that the airline will increase to about 10 aircraft in the next five years, becoming a strong operator in the East African region. We combine one of the most fabulous countries with affordable domestic fares. I can’t think of a better reason to visit Kenya on your next holiday.”
Jambojet is definitely on the rise, enjoying operational independence due to its own air operator’s certificate (AOC) and growing brand status. Its much-awaited debut to fly to international destinations within Eastern Africa is set to further cement its key role as an African LCC.
 

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