6 Dec 2012. Larry Madowo interviews Fastjet's Chief Executive who explains how they started their first base in Dar es Salaam, & hope to take over Fly540 Kenya in Q12013. "We started our first base in Dar es Salaam, we're wanting to do the same thing in Nairobi. Currently we're flying to 2 domestic destinations, we're flying to Mwanza and Kilimanjaro. The response has been absolutely incredible, with far more people than we expected and we're offering really low fares. Not every ticket on the plane is 20 dollars, the way it works is that if you book early you can get a ticket for 20 dollar. If you book very very late you pay quite a lot more. Our average fare is around 70 or 80 dollars, which means that a lot of people can pay 20 dollars. So if you plan ahead, plan what you're going to do then you can travel (inaudible). So these are people who in the past have travelled long distances by bus to Kilimanjaro and Mwanza; and now, for that sort of price, if they plan their journey, they can travel by aeroplane. We want to be in Tanzania and Nairobi, but started in Tanzania has they already had the airbus on their register, Kenya didn't and so it's taken a longer period time for the Kenyan authorities to get the airbus onto their licenses. Their engineers, their air-worthiness people, have to learn about the aeroplane so that they can supervise...The other carriers are not real low cost carriers, what people have done in the past is buy cheap planes which are 25/30 years old, they're only 50 seats, so they're really inefficient, they burn lots of fuel, they cost a load of money to run, so you can't get a low unit cost. Now our aeroplanes (Airbus 319) have 150 odd seats and are really efficient modern aeroplanes which means that I can really drive down the unit cost per seat. Look around the world, it's always that kind of plane, particularly the Airbus, but also the 737 which are the planes that really drive down costs and enable you to go into the marketplace....What we've done in Tanzania, it was a small operation (Fly540) and we shut that down before we started. Kenya's a slightly bigger operation, so what will happen is as Fastjet comes in Fly540 will disappear and it will be a very rapid transition from one to the other. We have no intention of running the 2 brands side by side. And, quite honestly, Fastjet is bringing something brand new to the African continent...Fastjet will bring operation to Kenya, I'm going to say in the first quarter of 2013 because it's quite a bureaucratic process, there's a lot of ticks and boxes and paper to move around. I'd love to have done it before Christmas, that was my original intent, but we wont hit that target. From Kenya we're looking at flying to Mombasa, but really all the regional capitals as well, so going down to Juba, Kigali, down to Lusaka. I think even though it's slightly longer down to Joburg - I think there's a lot of demand for really good value travelling that sort of distance, and Harare, those sort of places...Kenya Airways have been talking about Jumbo Jet for a quite a while and we haven't seen that yet, but bringing our model is not about taking market share from somebody else, we're not coming along saying 'my aeroplane is nicer & cheaper, come fly with me', it's about going to the market place and saying 'you can now travel for this really low cost on a really reliable, really comfortable flight and stimulating a whole new market', and people who haven't flown before are going to start flying. People who have flown once a year are now going to fly every month. Business people, whose sphere of action has been limited by their ability to travel will now have the whole of East Africa as their market. It's that sort of stimulating of the market - we did it in Europe with easyJet & Ryanair, it's been done in the State, in South America, Australia, it's even been done in Russia; and here in Africa it's just crying out for that sort of travel. Travel at the moment in Africa is 4 times as expensive as Europe. The average African airline seat costs 32c per seat kilometre, it's a quarter of that in Europe...Jetlink are using the wrong equipment, they're not really using the (low-cost) model because using the sort of aeroplanes they have just didn't give them that facility, and what we're going to do is start with Dar es Salaam, Nairobi, Angola and other places; so eventually but fairly rapidly Fastjet are going to have airlines throughout Africa. Now they're seperate airlines because of the regulatory environment, but to the consumer it's going to be one website, one great product, whether they're flying to East Africa or West Africa, Fastjet will be the same model, it will be the same service, the same quality and they'll know what to expect. To the customer it's one big airline, but in reality it'll be individual airlines...It's very difficult to predict exactly where we're going to be, but what we've said is that in 6 months we'll have 5 aircraft, in 12 months we'll have 15 as a minimum, my feeling is that there'll be quite a lot more than that, we've said that in 3 years we'll have at least 40 aircraft, those are predictions over where we could end up based on the demand there is in Africa at the moment and the growing middle classes, the amount of money the consumer has to spend, and it's not just statistics, you walk around Africa, you walk around the cities and you see how people are living. There's consumer demand and one of the things consumers like is to travel...Lonrho, who I'm sure everybody knows as they've been out in Africa for a long long time, they had this aviation division, Lonrho Aviation, which had 4 Fly540 companies in Kenya, Tanzania, Ghana and Angola (each had a slightly different level of shareholding). We decided to reverse that out of Lonrho into a seperate company, so Lonrho Aviation was taken out of Lonrho and into a company which was originally called Rubicon, we've now renamed it Fastjet PLC. So, like Lonrho, we're on the London Stock Exchange. The ownership of Fastjet now, 67% of it belongs to Lonrho, 5% to easyGroup which is owned by Stelios Haji-Loannou who started easyJet, and the rest is floated on the stock market. Now Fastjet has holdings in each of the Fly540 companies. So in Tanzania it's 90%, Kenya it's 49% and so on because there's obviously different regulatory requirements in each country...It's an incredibly exciting time for us having launched the airline and it's in the air."