Airlines Scramble for East Africa Market

Published on Monday 3rd January 2011

East Africa's growing economies have led to increased activity in the aviation sector in the region with airlines positioning themselves to tap into the growth.

The regional market has been the preserve of a few airlines which have kept air fares high, but the scene has changed in the past five years giving travellers more options.

Rwandair, Fly 540, Air Uganda, Jetlink and Kenya Airways have boosted their presence in the region by moving to new routes. They aim to tap into the growing travel in the regional cities of Entebbe, Juba, Kigali, Mwanza, Zanzibar and Dar es Salaam setting the stage for a battle for control of the regional market that for a long time remained in the hands of Kenya Airways.

Air fares have remained static in most of the routes in the last two years but the increased activity looks set to lower prices as the rivals grow and defend their market shares. "East Africa has a major market for us," said Nixon Ooko, the operations manager of Fly 540.

The coming into effect of the East African Common Market is a welcome development for airlines which saw it as an opportunity to tap into the free movement of people and goods in the region. Fly 540 has been one of the fastest growing airlines in the region, banking on its low fares.

The recent acquisition of East African Air Safari Express has given the low cost carrier the opportunity to increase its presence in the region by taking over the other airline's slots as well as new routes to Juba and Hargesia in Somalia.

"We are looking to grow our business in East Africa in the coming year," said Mr Ooko. Flights to Burundi and Southern Sudan are the most expensive in East Africa, ranging from $500 (KSh40,000) upwards. Increased competition on the Nairobi-Entebbe route has seen fares drop by about 10 per cent in the past two years to an average of $300 (Sh24,000).

Discovery of oil

The discovery of oil in Uganda is expected to increase demand for flights to the landlocked country, with airline's anticipating increased cargo and passenger numbers, especially with the completion of an airstrip near Lake Albert.

"We project good growth in the future on the Ugandan route with equipment for the mines and business travellers being the main driver," said Sanjeev Gadhia, managing director of Astral Aviation, a regional cargo airline.

Tanzania is seen as a major opportunity in the region mainly due to its size and mining activities.

Jetlink recently launched flights to Mwanza, a move that is expected to see the airline tap into the growing passenger numbers moving between gold mines in the town, the region and beyond.

For Astral Aviation Tanzania has been one of its better performing routes mainly driven by cargo to Zanzibar due to increased tourism activities as well as the demand for mining equipment and movement of mined material from Mwanza. However, the slow liberalisation of the regional airspace has seen some of the airlines' expansion plans delayed. East Africa has an open skies agreement that is yet to come into force. The agreement will open up the regional airspace.