Kenya Airways’ east African market share is set to come under increased pressure as smaller airlines increase traffic and cut fares as they race to capture new demand with the formation of the common market.Rwandair, Fly540, Air Uganda, JetLink and Precision Air, among others, have boosted their presence in the region by moving into new routes and by increasing frequency on existing destinations. They aim to tap growing travel in the regional cities of Entebbe, Juba, Kigali and Dar es Salaam, setting the stage for a vicious battle for control of the regional market that has remained in the hands of Kenya Airways.
Airfares have remained static in the region in the last two years, but the increased activity by the carriers look set to lower prices as the rivals grow and defend their market shares.
Fly 540, which flies Entebbe and Zanzibar, has introduced four weekly flights to Dar es Salaam as part of its expansion plans in the region, placing it in head to head battle with Kenya Airways and Precision. Fly 540 operate modern ATR turbo-prop and just recently it acquired a CRJ-100/200 jet aircraft.
Rwandair is at advanced stages in its plans to implement an Internet Booking Engine with credit card payment facilities. The booking engine will later be optimized to allow for bookings via mobile phone handsets. The airline unveiled a new flight schedule on SMS service that allow its travelers to query its flight schedule via SMS and get instant auto response with accurate flight details. Meanwhile the just concluded Private Sector Federation EXPO2010 has seen the national carrier gross over USD150, 000 in tickets sales. The airline has an introductory fare of Kshs 23,990 ($299) compared to Kenya Airways Kshs 36, 000 ($450), as airlines go big on promotions in an effort to attract travellers to their staple. The airline is also looking at increasing flight frequencies across the region and plans to buy two more planes next years after buying one this year to support its growth agenda.
Jetlink is expected to launch a flight to Mwanza before the end of the year after Tanzania’s civil authority gave it the nod. Air Uganda is working at expanding its presence in the region with the acquisition of a new airplane and increasing frequencies on one of its main routes, Nairobi. This month the airline launched an additional daily flight between Nairobi and Entebbe a move that is expected to increase competition in one of the most lucrative routes in the region.
Kenya Airways connects the five African countries that make the EAC (Kenya, Uganda, Tanzania, Burundi and Rwanda) and now its rivals are looking to replicate this strategy. The airline has dominated the route for years but in the recent past has seen the entry of Fly 540 and Air Uganda. The national carrier has pegged its growth on expansion in the region with introduction of new routes in Africa. In June, it introduced daily flights to Juba, raising competition on the route that has mainly been served by Jetlink, East African Express, ALS and Marshland.
Data from industry players shows that at least 6,620 passengers were carried on this route last month with Jetlink carrying at least 45 per cent of these, KQ 37 per cent and the rest being distributed among the other players operating from Nairobi. With increased business interest in Southern Sudan, Juba has become the leading destination with a lot of cargo from across the world moving to the city.
World’s airlines performance expectationsAccording to The International Air Transport Association (Iata), the world's airlines are expected to post a profit of $8.9bn (£5.7bn) this year, driven by increasing demand and stable costs. However, the body raised concerns on the European region that is expected to post some losses this year.
BBI will solve it :)