LOW-COST airline fastjet has suspended some routes and shelved expansion plans into the region, as poor load factors and depressed margins affect viability, the Zimbabwe Independent has heard.
Despite its various promotions that have seen domestic and regional flights costing US$30 and US$50 respectively for a one-way ticket, excluding taxes, fastjet has been unable to achieve its desired load factors and increase flight frequencies to targets.
As a result, Civil Aviation Authority of Zimbabwe (Caaz) sources said the airline has been forced to suspend its Victoria Falls-Johannesburg route and shelve plans to expand its route network into East Africa.
“The promotions didn’t yield the desired results; the airline has been getting smaller margins per passenger which is trouble for any aviation or airline operator,” a highly-placed source with Caaz said.
The airline has also suffered as a result of the country’s import prioritisation exercise, which is part of efforts to stop externalisation of the scarce United States dollar.
As a result, customers are unable to purchase tickets in bulk using international payment platforms.
“We would kindly inform you that Zimbabwean Visa/Master Cards for online purchases above US$200 may not be processed as a result of the current financial situation in Zimbabwe,” reads a notice on fastjet’s website.
Although fastjet PLC CE Nico Bezuidenhout confirmed the airline had suspended its Victoria Falls-Johannesburg route, he insisted it was an internal strategic decision that is not related to the viability of the route or the impact of lower margins due to promotions.
He, however, let the cat out of the bag, saying the suspension of the route and expansion drive was part of a “stabilisation” exercise.
“Our load factors are healthy and promotions further enhance not only passenger volumes but also the value proposition to consumers,” Bezuidenhout told businessdigest.
“The suspension of our route between Johannesburg and Victoria Falls forms part of fastjet’s stabilisation plan, which requires a narrowed commercial focus on network points that perform better commercially,” he said.
Speaking on the decision to shelve expansion plans into East Africa, Bezuidenhout said the company’s stabilisation plan calls for the consolidation of its network, adding there was a measure of introspection prior to considering any growth.
“However, our ambition of being the first truly Pan-African low-cost airline informs our future path and, as such, the stabilisation plan will naturally be followed by a period of prudent, considered growth,” he said.
Since fastjet Zimbabwe began operations in October 2015, the airline has flown over 100 000 passengers across the Zimbabwean skies, Bezuidenhout said.
Currently, it has 32 flights per week to and from Harare, Johannesburg and Victoria Falls. fastjet’s challenges come as another carrier, Rainbow Airlines, has come onto the Zimbabwean market.
Rainbow Airlines took to the skies on January 25 with its inaugural flight from Harare to Victoria Falls.
State-owned carrier Air Zimbabwe is a major competitor on the domestic market, having acquired new aircraft as part of a revival strategy.
The troubled Air Zimbabwe has announced plans to recapitalise either through engaging strategic partners or through government grants.