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| Mr Manongi |
The country's air fares are fully liberalized for all air operators,
both conventional and low cost carriers, but fare undercutting is not allowed.
However, undercutting is possible when the fares are introductory, the
Tanzania Civil Aviation Authority (TCAA) has said.
The TCAA said in Dar es Salaam that there is nothing wrong with the new
entrant in the local aviation industry, FastJet, who charge low fares as their
operation mode is quite different from that of traditional service providers.
FastJet capitalizes on economies of scale, due to low costs per seat, as a
result of high load factors.
TCAA Director General Fadhili J. Manongi said that budget airlines make
their day by playing with the number of passengers carried due to low fixed
costs per passenger, thus are able to charge reasonably low fares.
"For
low cost airlines, yields per passengers are relatively (small due to low
fares), compared to traditional airlines (which have high yields per
passenger), due to high fares, but they maximize revenues from the larger
number of passengers," Mr Manongi said.
Further, the services offered are different from the traditional ones.
If they have to be offered one has to meet fare requirements and pay for
baggage and refreshments on board, among others. In the traditional business
model, these costs are inclusive in the fare.
According to FastJet website, passengers are required to part with
40,000/- in case a change of departure date is necessary. The airline operates
two Air Bus 319s with capacity to carry 150 passengers. 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
fails to report at the airport.
"In the event of cancellation FastJet will
not compensate you (customer) further than a full refund (claimed by
writing)...or rebook an alternative date without additional fees," the
airline's info on website shows.
The TCAA boss said that conventional airlines concentrate on high yield
per passenger by offering luxurious services from checking in to take off and
eventually, to landing.
"The good thing is that both budget airlines will
continue to operate in the same skies as their conventional counterparts,"
the DG said.
The University of Dar es Salaam Senior Lecturer (Economics), Dr Haji
Semboja said that the fares offered by FastJet are too low to be realistic 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
promotion basis," Dr Semboja told the 'Daily News.'
FastJet has said it would break the tradition that those who fly are
the elite or special groups in the society. The airline wants to make everyone
able to fly at affordable costs. Its fares start from as low as 32,000/-
excluding taxes and fees to over 200,000/-.
The earlier the booking the better the fare one gets. On Tuesday, the
airline completed its first weekend of operations, with all departures on
schedule. The airline operated two trips a day each from Dar es Salaam to
Mwanza and Kilimanjaro.
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam
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