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EasyJet's founder hopes to use his low-cost business model to tap into Africa's untapped air travel market.
The founder of easyJet is hoping to bring his low-cost airline model to what he calls "the aviation industry's last frontier" - Africa.
Through the new airline, named Fastjet, Stelios Haji-Ioannou hopes to tap into the growing African middle class, spurred by the continent's strong economic growth.
Earlier this month, Haji-Ioannou joined forces with African conglomerate Lonrho, which owns the low-budget airline Fly540, to create Fastjet. Operations will begin in Ghana, Kenya, Tanzania and Angola, eventually expanding to more markets.
"These four countries are currently experiencing great GDP growth, along with oil and gas discoveries and developments," said Fastjet's CEO, Ed Winter, according to CNN.
"We believe that the time is absolutely right to change Fly540 into a much bigger airline based on the low-cost model which has been successful in every other part of the world," he added.
Fastjet, which will be majority-owned by Lonrho, aims to carry roughly 12 million passengers a year, operating about 40 aircraft. Fares would average between $70-80 before tax.
Africa represents a largely untapped market for airlines, and low-cost airlines in particular. In 2011, budget airlines accounted for only 9 percent of the market for the entire continent. Airbus predicts African air traffic will expand 6.5 percent per year between 2011-2020, and by 4.9 percent between 2021-2030.
Jun 27, 2012