Tanzania's Fastjet: Why it’s not cheaper anymore

Is Fastjet really a low-cost airline? This question has been asked several times by passengers flying Tanzania’s budget airline, but the answers have been confusing, sometimes misleading.

Think about these facts. If you booked your flight to Mwanza from Dar es Salaam seven days before travelling, the return ticket will cost you a whopping Sh696,000 if you don’t have any luggage weighing 20kg or more, which costs an extra Sh20,000. This means that a return ticket for a traveller with at least 20kg of luggage costs Sh716,000.

That is what happened last week, when Asha, a 34-year-old businesswoman, booked a Fastjet flight to Mwanza, hoping to travel next Sunday, on Easter, and return to Dar es Salaam on April 14, this year.

“I was shocked to hear that it would cost me that much money (Sh716,000) for a return ticket to Mwanza…is Fastjet still a low-cost airline?” she asked in a text message to The Citizen.

On the same day, Asha tried to book a flight on Precision Air (PW), which flies to Mwanza once daily, and was told to pay Sh720,000 for a return ticket. It is not clear what has pushed PW to charge Sh720,000 for a return ticket at a time when competition is stiff and fuel prices have gone down sharply.

The story is the same if you want to fly to Kilimanjaro, Mbeya or elsewhere where Fastjet, which markets itself as a low-cost airline, flies.

From Mbeya to Mwanza, Kilimanjaro to Dar es Salaam, Fastjet has been making its name as a low-cost airline, but in reality, it is not, according to various customers who have aired their complaints.

Asha is not alone. There are thousands of passengers who have not understood clearly whether Fastjet is a low-cost airline or not—thanks to the exorbitant fares charged by the airline, which currently controls the domestic market.

Mr Sadock Magai, a prominent lawyer based in Dar es Salaam, last December complained bitterly about what Fastjet was charging passengers. He described what Fastjet was charging passengers as “daylight robbery”, adding that it was a tragedy that nobody, least of all the regulator, was willing to stop what was going on.

Since then, there have been hundreds of people complaining about what Fastjet is charging, especially on the Dar-Mwanza and Dar-Mbeya routes.

Although Fastjet officials have spoken to The Citizen reporters about the matter on several occasions and defended the carrier, the reality on the ground raises one simple question – is Fastjet is a low-cost airline or not?

Perhaps what confuses many customers is the fact that while fuel prices have globally declined by almost 60 per cent, with a barrel costing roughly $46, local airlines—including the so-called low-cost ones, were still charging exorbitant fares.
International Air Transport Association (IATA) CEO Tony Taylor said in 2013 that fuel then constituted 33 per cent of airlines’ operational costs.

“Fuel now represents 33 per cent of our operating budget, and the consensus forecast in March was for jet fuel to average $130 per barrel [42 gallons], which is $3 more per barrel than in 2008 when our industry was nearly brought to its knees by the oil bubble. In recent weeks, we have seen some easing of prices; nevertheless, they remain worryingly high when measured against historical averages,” he said.

But since then, fuel prices have declined drastically, reaching record lows, according to latest reports from Bloomberg News Wire service.

Why isn’t there any decline or just a reflection of the falling fuel prices on fares charged by local airlines? Some airlines claim that they purchase fuel on long-term contracts of up to one year, where prices are fixed regardless of whether there would be increases or decreases in price during that period.

But others, including Fastjet, still lack a clear explanation on what is really pushing fares beyond the reach of those it claims to target—ordinary people.

Speaking to The Citizen earlier this year, Fastjet’s East Africa General Manager, Mr Jimmy Kibati, admitted that there were some unscrupulous agents who were overcharging passengers, but he defended the airline’s ticket pricing, saying it was fair.

This was after some passengers paid up to Sh800,000 for a one-way ticket to Mwanza or Mbeya in November and December 2014, forcing the Ministry of Transport to intervene.

Mr Kibati said the Fastjet business model is fair for those who plan their travel months in advance, but expensive for emergency travellers.

But to what extent has Fastjet stated this clearly to its customers is anyone’s guess.

Last week, Mr Kibati told The Citizen that all registered travel agents approved to represent it countrywide were eligible to charge 20 per cent as their service fee.

 Mr Kibati added that there were unapproved agents who had been overcharging customers.

What is happening, according to Mr Kibati, is that unauthorised agents will purchase Fastjet tickets directly from the airline or an approved agent at normal prices and then sell them to customers, adding over 40 per cent to the price.
Source: The Citizen, reported from Dar es Salaam, Tanzania

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