The entry of a low cost airline into Tanzania’s skies is causing panic and uncertainty among local airlines with Precisionair and Air Tanzania facing a tough business future, The Guardian on Sunday can reveal today.
The low cost airline backed by Easy Jet founder Stelios Haji-Ioannou hit Tanzania’s skies two weeks ago, bringing low-cost flights to thousands of people in the country.
Dubbed Fastjet, the no-frills carrier is expected to dent the profit margin of the country’s only big private airline, Precisionair as well as the struggling Air Tanzania, which resumed its services two months ago.
The move comes after Haji-Ioannou's EasyGroup teamed up earlier this month with pan-African conglomerate Lonrho to create the low-cost carrier. Lonhro, owner of budget airline Fly540, has agreed to sell its aviation business to investment firm Rubicon Diversified Investments, in which EasyGroup will hold a 5 percent stake.
Apart from Tanzania, the new airline would also start operations using the Lonrho existing network in Ghana, Kenya and Angola, before expanding to more markets in the future.
According to a survey conducted by The Guardian on Sunday, Precisionair has been affected by the new low cost airline, which charges $20(Sh32,000) excluding taxes and other airport charges.
Though Precisionair this week said it wasn’t threatened by the new low cost airline, the reality on the ground shows the opposite because the airline has been forced to review its fares immediately to cope with the growing competition
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