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The battle for supremacy in the country's civil aviation industry is
set to intensify, following the entry of low cost carriers in the
market.
The battle is expected to be mainly between FastJet and the Precision Air.
Precision Air is, however, counting on flexibility of its ATR fleet
capable to land on underdeveloped airstrips with short runways, which is
an advantage over the low cost carrier, which operates a gigantic
equipment -- Airbus A319.
"The ATR 42-600 is suited to our growth ambitions on the African
continent and ably supports our plans to fly new routes and increase
frequencies on existing ones.
"It affords our passengers excellent cabin comfort, while enhancing
operating efficiency," Precision Air Group Managing Director and Chief
Executive Officer, Mr Alfonse Kioko, told a news conference recently.
FastJet Chief Commercial Officer, Mr Richard Bodin, recently said the
aircraft is not able to land on some underdeveloped airports and
airstrips in the region.
"We shall fly to where we can be able to use it," he said.
The low
cost carrier, FastJet, announced that it will start operation at the end
of this month (November) following acquisition of Fly540. The price per
route is pegged at 32,000/- exclusive tax, but a passenger has to pay
for his luggage, food and refreshment while on flight.
FastJet said it will have 10 fare classes and the lowest fare is
32,000/- between Dar es Salaam and Lake Victoria port city of Mwanza,
while the highest tariff is around 170,000/- per trip using the
150-seater Airbus 319.
The rising air transport competition is prompting
airlines to go back on drawing tables to sharpen their services offered
on and off board.
Precision Air, the largest carrier in the country, has ordered five
ATR latest version, Dash 600, aircraft to be delivered in the next three
years.
One, ATR 42-600 was delivered last week while three others are
in pipeline and one ATR 72-600. Mr Kioko said his company will invest up
to 100 million US dollars (about 160bn/-) in a bid to expand the
company's fleet in the next few years.
Mr Kioko said the 50-seater new aircraft will be used to increase
frequencies on the airline's Dar - Kilimanjaro route. "The introduction
of these new series aircraft will increase our ATR fleet to 14 thus
making the airline largest ATR operator in Africa," Mr Kioko stressed.
Mr Kioko said his company is focused towards making the country the
first and the only one in Africa to own sophisticated and modern
navigation model that will optimise time for approach, reduce fuel
consumption and more comfort for passengers.
ATCL, which resumed flights recently using Boeing 737-200, an older
version of B737, is offering competitive fare of around 200,000/- return
for Dar-Mwanza.
However, industry sources have played down the move
that they have described as Fastjet's short-term strategy to capture the
market share with no much effect in the market, in the long run.
The airline analyst, who preferred anonymity, said anything below
150,000/- return fare is unrealistic fare since there is no gain on such
prices as aviation operational costs are very high.
"It will affect
other airlines in short-term as passengers will be pulled by the lower
price, but not in a long run they'll return as quality of service
matters most," he said.
He added: "Current prices at the market are very fair, despite being
competitive." The analyst said the prices are unrealistic as flying to
and from Kilimanjaro an aircraft like B737 or A319 burns 6,000 litres of
fuel, equivalent of 6,000 US dollars (over 9.6m/-) without taking into
consideration salaries, landing fees, maintenance and other running
costs.
"The FastJet fare will only be sustainable if the airline receives
subsidies from elsewhere," he said. "Otherwise it's just a market
capturing gimmick in a short life span." The Precision Air Chairman, Mr
Michael Shirima, said the airline always puts passengers' comfort and
safety before anything and that is why they ordered the new
state-of-the-art aircraft.
"We want our passengers to enjoy their flight, all the way and not
arriving at their destination with gloomy faces," Mr Shirima, who is
also the founder of Precision Air, said. Precision Air is the leading
airline in the country with a fleet of 14 aircraft and is owned by local
shareholders by almost 30 per cent.
Launching the airline last week, FastJet Chief Executive Ed Winter
said they wanted to break the exclusivity that air travel was an option
for a minority in the country. "FastJet will make flying an affordable
option for more Tanzanians than ever before," Mr Winter said.
Experts are saying giving the high operative costs of airline the
FastJet offered price of 32,000/- for a single route may be limited to
two or three passengers. The rest of passengers travel for 100,000/- or
120,000/- for single way, which is translated to similar prices offered
by Precision Air and ATCL.
Tanzania Securities CEO Moremi Marwa said despite a number of
challenges facing aviation industry, "Precision Air is still a good
company to buy." "Even if the low-costs are coming in, Precision is
still doing well compared to competitors," Mr Marwa said.
"It will take not less than a year for the new comers to catch-up
with Precision Air." At the end of the runway, the customers are the one
who would benefit most on the current escalating competition due to
improved services and equipment and as well as affordable fares.
Source: The Daily News,http://www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam
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