Archive for September, 2015

Jambojet flies into a loss in year one but is optimistic for the future

JAMBOJET REPORTS FIRST YEAR LOSS OF 287 MILLION KENYA SHILLINGS

(Posted 29th September 2015)

News from Nairobi confirmed lingering speculation that Kenya Airways’ low cost subsidiary Jambojet has posted a loss for their first full year of operation.

Operating a fleet of mixed jets and turboprops, B737-300’s and Bombardier Q400’s, does Jambojet presently fly from Nairobi to Mombasa, Eldoret, Kisumu but also to Lamu, Malindi and Ukunda.

The number of passengers carried during the first year reached just over 480.000, contributing to revenues of over 2.6 billion Kenya Shillings. No information could be obtained in regard of load factors however which for a low cost airline constitute a crucial element in reaching breakeven point and eventually turning profit.

While the airline was also designated by the Kenya Civil Aviation Authority to commence flights to as many as nine regional destinations has Jambojet yet to spread their wings beyond Kenya’s airspace as it clearly concentrated to first make an impact on domestic routes.

It is generally expected that the financial results of the second financial year will be better now that the airline has established itself on key routes as a low cost alternative to full service airlines and with the potential to launch extra flights to key regional destinations.

UNWTO welcomes adoption of Sustainable Development Goals


(Posted 29th September 2015)

UNWTO welcomes the adoption of the Sustainable Development Goals (SDGs) and reiterates its commitment to work towards the implementation of the Goals.

Tourism is one of the most dynamic economic sectors, with significant global reach, and can make an important contribution to the achievement of the SDGs, particularly in the areas of job creation, sustainable consumption and production and the preservation of natural resources.

Issues such as climate change, effective resource management, poverty reduction and inclusive growth need to be at the center of tourism development. Now that the Goals have been approved, it is time to step up our action, time to advance policies and business strategies that monitor and minimize the negative effects of tourism development and maximize its positive impacts, namely through the distribution of its benefits among host communities‘ said UNWTO Secretary-General, Dr. Taleb Rifai.

The SDGs are a universal 17-goal plan of action for people, the planet and prosperity for all countries and require all stakeholders to act in collaborative partnerships. The SDGs were approved by the 70th Session of the United Nations General Assembly on 25 September 2015.

Tourism is included in the SDGs as a target in Goal 8, Goal 12 and Goal 14:

– Goal 8, on the promotion of “sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all includes as Target 8.9 "By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products".

–Goal 12 aimed to “ensure sustainable consumption and production patterns” includes as Target 12.b to "Develop and implement tools to monitor sustainable development impacts for sustainable tourism which creates jobs, promotes local culture and products".

–Goal 14 set to “Conserve and sustainably use the oceans, seas and marine resources for sustainable development” includes as target 14.7 "by 2030 increase the economic benefits of SIDS and LCDs from the sustainable use of marine resources, including through sustainable management of fisheries, aquaculture and tourism".

Ethiopia set to build Africa’s largest airport outside Addis Ababa

NEW MEGA AIRPORT IN THE PIPELINE FOR ADDIS ABABA

(Posted 29th September 2015)

Information is emerging from Addis Ababa that at the sidelines of the Airport Infrastructure and MRO conference last week Ethiopia’s Minister for Transport Gebeyehu announced that ground will be broken soon for a new mega airport close to the capital.

The new airport will, when complete, be able to handle up to 120 million passengers a year and become the new home for fast growing Ethiopian Airlines, presently the largest and most profitable African airline with a network spanning across all continents.

Gebeyehu was quoted to have said that the airport project would be similar to the great Renaissance Dam in terms of investment value and allow Ethiopia to position herself as Africa’s number one aviation hub. After working for some time on identifying a suitable site has EAE, which earlier on had appointed French consulting firm ADPI to assist in site sourcing, now given three possible locations for the new airport and that government will now embark in a consultative exercise with local communities before making a final decision.

To be built in several phases will the new airport eventually have four runways, several passenger terminals and notably an airport city be built which will, when ready, provide facilities equal to similar projects elsewhere in the world.

Ground breaking is anticipated in about two years from now and the construction of the new airport could take as much as ten years to be fully completed and probably not a moment too soon considering the increasing capacity constraints at Bole International Airport. Build initially for a capacity of six million passengers has traffic exceeded this last year already with more than eight million passengers arriving, departing and transiting. Work is underway however to raise the capacity to over 20 million passengers to serve as a stop gap until the new mega airport will be ready.

Airport operator Ethiopian Airport Enterprises oversees nearly two dozen airports and aerodromes across the country including four international airports and is expected to invest at least four billion US Dollars in the new facility, at present day cost.

Airport developments in Africa have been largely lagging behind traffic increases with Nairobi’s Jomo Kenyatta International Airport a prime example and while Kenya is now aggressively expanding their main airport have similar plans been slow in coming elsewhere. A new international terminal will be ready next year in Dar es Salaam and Rwanda, just having expanded their present international airport in Kigali – a taxiway is being constructed right now to allow for a higher rate of landings and take offs as traffic increases – is also in the final stages of planning for a brand new international airport outside the capital at Bugesera.

Notably did South Africa make major investments in new and modernized / expanded aviation infrastructure ahead of the 2010 FIFA World Cup, a move now benefitting the country through increased visitor numbers who come to the country for tourism and trade.

Lillian Gaitho takes aim at the MICE market …

No sooner had the new week started did Lillian also start her regular contributions,
this time looking at the MICE industry and
the upcoming Magical Kenya Travel Expo 2015.
Enjoy the read!

Kenya Counting on Meeting & Conferencing Incentives to Bolster Tourism

The 5th edition of the annual Magical Kenya Travel Expo (MKTE) scheduled to take place at Leisure Lodge Resort in mid-October is yet another mark of success on the government’s efforts in capitalizing on the MICE industry as a viable and supportive medium to the main tourism sector. Addressing delegates during the unveiling of the venue, KTB Director, Muriithi Ndegwa noted that the Magical Kenya Expo ‘has attracted interest and attention from the stakeholders as evidenced by the growth of exhibitors to over 40 % in the past four years‘.

The Expo, which will bring together more than 170 hosted buyers and delegates from all corners of the globe will not only serve as a convention for buyers and sellers but also aims to showcase Diani to the world in it’s light as Africa’s best beach .

But as Estelle Verdier, Managing Director for Jovago.com an online hotel booking company explains, it is important for stakeholders to broaden their perspective on the contribution of MICE events beyond visitor spending. This, according to Verdier who heads the East and Southern Africa regions will help identify opportunities and leverage on hitherto unseen markets within or beyond the destination.

It’s also important to note that unlike cultural, adventure and sporting events; business events will most likely attract a corporate market segment who may be interested in trade and investment. It is therefore wise to position the host destination in a favorable position while also organizing sessions to showcase the same.

In this light, educational conventions such as seminars, forums, workshops and conferences should shift focus from pure sightseeing and lean more towards knowledge dissemination, trainings, on-site case studies and long-term exchange programs. Organizers of such events must ensure corresponding facilities in the host destinations are available and in favorable conditions.

According to MICE, this (Meeting, Incentive, Conference and Exhibition) market in global terms is valued at $30 billion with hotels accounting for 60 per cent of the total value. The International Congress and Convention Association grades Kenya as the second most favored conference and business destination on the continent after South Africa.

Good Year for Kenya

The MICE industry in Kenya has been labelled as one of the fastest growing within the tourism sector; this is partially supported by the country’s positioning as an economic hub in the region and complemented by other factors such as suitable infrastructure, development in ICT and a flourishing hotel sector.

The upcoming edition of Magical Kenya Expo comes in the backdrop of other distinguished events including the much successful President Obama visit for the Global Entrepreneurial Summit, the beatification of St. Irene in Nyeri County and the World Ministerial Conference in Mombasa. It has been a good year for Kenya in spite of the harsh months in the beginning of the year. The final quarter of the year also has its fair share of events which include the African Travel Association and Pope Francis’s visit.

Check out www.magicalkenya.com for more information about Destination Kenya.

THE COPPER CHIMNEY

More food and restaurant reviews from RefinedPalates … and as before another eye opener, especially for cricket fans …

refinedpalates

The last time I was at Lugogo Cricket Oval was during the last quarter of 2012, and at the time the restaurant was called Oasis. When I saw Copper Chimney in its place a couple of days ago, I was itching to know the difference. Sure, restaurants rebrand and change management all the time so I took this as an opportunity to compare and contrast. 
When I walked in one sunny afternoon, the interior was pretty much the same. Dark wood furnishings arranged neatly in the fifty and above seating area, with the tables draped in white linen. I sought a table in the breezy corner and waited for service. 
Copper Chimney
Soon thereafter, a neatly dressed waitress approached me with the menu. I thanked her and read through what The Copper Chimney had to offer. Weird name for a restaurant, in my opinion. Anyway, the meals on offer were pretty much…

View original post 262 more words

After leasing five A319’s does this African LCC buy their sixth aircraft outright

FASTJET’S HALF YEAR RESULTS GIVE BOOST TO LCC CONCEPT AS AIRLINE BUYS FIRST JET

(Posted 28th September 2015)

The upwards trend of carrying more passengers month after month has now translated into a vastly improved financial performance of Fastjet PLC, the UK based and London Stock Exchange quoted company which aspires to become Africa’s continental Low Cost Airline. While suffering the fallout of depreciating currencies in Tanzania and other countries where Fastjet flies to, does this not immediately impact on the half year results but will need factoring in for the second half of the year 2015 and the projections for next year, i.e. 2016.

In fact, much of the improvements vis a vis higher passenger numbers and additional aircraft on the fleet allowing for more frequencies and new routes, did not make it into the first half results as most of these changes were effected during the early second half of the financial year.

Besides the financial updates did news also emerge that Fastjet has broken tradition – the airline has leased the current five jets on its fleet – and opted to purchase their sixth Airbus A319 outright as an estimated cost of some 15.5 million US Dollars.

Key operational and financial data obtained from Fastjet show where significant progress was made over the past 12 months:

Operational highlights

H1 2015

· fastjet Tanzania

o 51% increase in aircraft utilisation (from 6.4 to 9.7 block hours per aircraft per day)

o 56% increase in total capacity (seats flown)

· 94% punctuality – (arrival earlier than or within 15 minutes of schedule)

Financial highlights

H1 2015

· fastjet Tanzania

o First half revenues US$31.5 million (H1 2014 US$19.0 million)

o 7% increase in average revenue per passenger to US$86.61 (H1 2014 US$81.69)

o 56% increase in passengers carried to 363,769 (H1 2014 232,855)

o First half losses before tax of US$9.0 million (H1 2014 US$13.9m)

· fastjet Group

o Operating loss before exceptionals US$12.8 million (H1 2014 US$17.3 million)

o Operating loss after exceptionals US$12.8 million (H1 2014 US$19.8 million)

o Closing net cash US$70.0 million (H1 2014 US$17.9 million)

o US$75 million equity fund raise (before costs), significantly broadening the institutional shareholder base

· Share capital reorganisation – consolidation of ordinary shares on the basis of one new share of £1 each for every 100 shares of 1p each

Ed Winter, CEO of Fastjet PLC, used the opportunity of having the H1 results published according to LSE rules, to comment on the changes as follows:

Using the same assets as in H1 2014, three Airbus A319s, in H1 2015, through better utilisation we increased the number of seats flown by 56 per cent, total revenue increased by 66 per cent and operating losses reduced by 26%, a great achievement. Since then, in Q3 2015, we have doubled the size of the fleet to six and are well on our way to having three bases, Tanzania, Zambia and Zimbabwe fully operational by the end of the year. This expansion of the fleet and network is particularly important in laying the foundations for profitable growth in 2016. Whilst we have seen these very significant improvements, African currencies have lost considerable value against the US dollar, which combined with a worldwide reduction in commodity prices, has caused an economic downturn in both Tanzania and Zambia. In addition, the start of operations in Zambia and Zimbabwe has been delayed into Q4. Accordingly the Board has downgraded its forecast for full year 2015 but is confident of meeting its expectations for 2016’.

Meanwhile did the Chairman of the company, Mr. Clive Carver, also offer his comments when making the announcement earlier today:

I am pleased to introduce the results for the six months to 30 June 2015, a period in which the Company’s future was transformed by an equity fundraising of US$75 million to provide expansion working capital and funding for the acquisition of aircraft. The fundraising marked a major step towards achieving our vision of becoming the most successful pan-African low-cost airline through our strategy of operating domestic and international routes in all viable African markets. The impact of this funding, however, is not reflected in the results for the period under review during which we operated three A319 aircraft on essentially the same routes as 2014. The improvement in the financial results set out in this interim statement compared to the corresponding period in 2014 result from greater utilisation of the fleet from steadily increasing demand across the network. As a result of slower than anticipated route development and the impact of weak African currencies, in particular the Tanzanian Shilling (TZS) against the US dollar, we now expect trading in the second half of 2015 to be materially behind management’s expectations. The Board has not adjusted its forecasts for 2016’.

Operations

· Punctuality and reliability in the six-month period in review remained excellent, with 94% of flights arriving on time (earlier than or within 15 minutes of schedule) with less than 1% of flights cancelled.

· Aircraft utilisation increased over the period to reach 11.2 block hours per aircraft per day by August 2015. This is an optimum figure for the current fleet size and more aircraft are required in order to expand the network.

Growth in Tanzania – Domestic and International

· fastjet Tanzania is already by far Tanzania’s largest airline, flying over 10,500 seats a week on 76 flights from Dar es Salaam. Its nearest competitor, Precision Air, offers approximately 4,700 seats on 73 weekly flights (Source: OAG Analytics data, 5 August 2015). During H1 2015 fastjet Tanzania increased capacity from 330,050 to 518,230 seats.

· In July, fastjet Tanzania added its sixth international route to its network between Dar es Salaam and Lilongwe in Malawi.

· Flights from Dar es Salaam to Johannesburg have increased from three a week to daily, and flights from Dar es Salaam to both Lusaka and Harare also moved to a daily programme. Fastjet Tanzania operates five flights a day from Dar es Salaam to Mwanza and four flights a day to Kilimanjaro. This increase in flights will be flown by an additional Airbus 319 aircraft that was introduced into the Tanzanian fleet in September 2015.

· fastjet has continued to lobby vigorously with regards to the outstanding designation on the Bilateral Air Services Agreement (BASA) between Tanzania and Kenya. The Company is hopeful of a successful resolution before the end of the year.

Growth beyond Tanzania

· fastjet Zimbabwe – The Company expects to be granted an Air Operator Certificate (AOC) for fastjet Zimbabwe shortly, with a demonstration flight scheduled within the coming weeks being the final hurdle. Following the grant of the AOC we will apply for the Zimbabwe government to designate fastjet as a Zimbabwe airline under the Bilateral Air Services Agreement (BASA) with various destination countries. fastjet Zimbabwe’s rate of growth will depend on the speed with which these designations are achieved.

· fastjet Zambia – The AOC process in Zambia has been delayed as the Zambia Civil Aviation Authority (ZCAA) had to externally source Airbus qualified personnel to assist with the fastjet Zambia AOC application. The South African CAA has been engaged to assist the ZCAA and the granting of fastjet Zambia’s AOC and the launch of flights is now on track for late Q4 2015.

· Other fastjet airlines – Bases in Kenya, Uganda and South Africa are planned for 2016.

Fleet expansion

· During Q3 2015 the fastjet fleet has doubled from three to six aircraft increasing capacity from approximately 28,000 seats per week in January 2015 to a forecast 50,000 seat per week in December 2015.

· In August 2015, fastjet announced the signing of operating leases for a further two A319 Airbus aircraft. One of these aircraft is the launch aircraft for fastjet Zimbabwe, with commercial flights expected to start in October.

· The second new leased aircraft, the fifth in the fleet, has been added to the fastjet Tanzania operation and went into service on 1 September 2015. This aircraft has provided fastjet Tanzania the opportunity to enhance the Dar es Salaam to Johannesburg route to a daily flight operating at a prime time of day, with good connections to the fastjet Tanzania domestic network.

· As announced today, the first purchased aircraft, which will be the first in the fastjet Zambia fleet and the sixth in the fastjet group fleet, was delivered on 25th September 2015.

· Dependent on existing and new market development, and the availability of suitable aircraft, fastjet may potentially add further aircraft to the fleet before the end of 2015.

Ancillary Revenue

· fastjet Tanzania has seen a steady growth of ancillary revenue year on year up by 100% from $1.2 million in H1 2014 to $2.4 million in H1 2015. As a low cost airline, fastjet strips out many of the traditional services of a full fare carrier and excludes extras such as baggage and meals on board, giving the passenger the option to purchase them as add-ons if required. A profitable ancillary revenue stream is therefore produced as fastjet offers services and functionality to customers who require them. This more transparent form of charging was new to Tanzania when it was introduced by fastjet Tanzania and has been successfully rolled out across fastjet’s East African markets.

· In July 2014, fastjet launched the ‘choose my seat’ facility, where passengers can choose their seat for a small fee. In H1 2015, over 23,000 seats were booked in this way by approximately 6% of passengers.

· fastjet’s multiple distribution channel mix presents differing opportunities for the sale of ancillary products and services.

· Looking forward, fastjet intends to maximise sales by introducing new services and embrace opportunities available from scale and technology. Specifically fastjet plans to introduce a new internet booking engine which will facilitate the merchandising of ancillary services within the sales path. In H2 2015, fastjet will introduce a charge for holding quotes for a specific “hold my fare” period and review the possibilities of broadening the on board retail product line.

Distribution

· Due to the variable nature of sales infrastructure across East Africa, fastjet maintains a varied mix of distribution methods. In Tanzania fastjet runs its own sales shops and has web and mobile sites, the conversion statistics of which are in line with the world’s best travel websites.

· fastjet also works with a third party call centre, travel agents and various on line travel agents and consolidators including Expedia and Skyscanner. In its destination markets, fastjet web and mobile sites are growing successfully; in country there is a greater reliance on general sales agents who typically work with a variety of other airlines to distribute seats locally.

Overall several sets of good news especially the outlook for 2016, during which Fastjet is again expected to undergo rapid growth especially in the new markets the airline intends to branch out to, i.e. Zimbabwe, Zambia, Uganda and Kenya. For breaking and regular aviation news from the wider Eastern African region look no further but this space.

Air Seychelles expands fleet with imminent arrival of another Twinotter

AIR SEYCHELLES PREPARES FOR DELIVERY OF ANOTHER BRAND NEW DHC 6-400 TWINOTTER

(Posted 28th September 2015)

Growing demand for the scheduled domestic flights between Mahe and Praslin and increased charter business to other islands is thought to be the primary reason why Air Seychelles is shortly taking delivery of another Twinotter DHC6-400 aircraft, a state of the art STOL plane capable to land and take off from very short airstrips.

It is understood from a regular source close to the airline that the aircraft will tomorrow commence its ferry flight from Calgary to Mahe, taking several days and crossing the Atlantic, the Mediterranean and finally the Indian Ocean for a homecoming to the archipelago.

Named ‘Isle of Denis’ and presently registered as C – GVOT will the new aircraft join their sisterships in October to commence flight operations across the archipelago.

The route from Canada to the Seychelles can be tracked via https://share.delorme.com/bobsworld according to information received, a bonus for aviation buffs keen to see the advance of the ferry flight over the next few days.

Notably have several codeshare agreements Air Seychelles signed in the past with Etihad and other Etihad partner airlines been extended to cover Praslin, giving the hospitality industry on the archipelago’s second largest island a boost when marketing their resorts.

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