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Wednesday, July 11, 2012

Is Africa Ready for Low-Cost Airlines?


By ELEANOR WHITEHEAD
Stelios is bringing sub-Saharan Africa its first low-cost airline franchise in the form of FastJet, but he faces big challenges in the continent’s illiberal airspace
FastJet, a new African discount airline backed by easyJet’s founder Stelios Haji-Ioannou, will take to the skies by October, potentially redefining air connectivity on the continent – if the group can navigate Africa’s tricky low-cost market.

The airline was established out of the reverse takeover of pan-African conglomerate Lonrho’s aviation division by AIM-listed Rubicon Diversified Investments. Stelios became a 5 percent shareholder in Rubicon via his easyGroup Holdings, establishing a brand license agreement to re-launch Lonrho’s Fly540 airline – which operates in Kenya, Tanzania, Ghana and Angola - as ‘FastJet’, using the easyJet discount model.

Stelios, who sees Africa as “the aviation industry’s last frontier”, is looking to tap into the continent’s growing markets and expanding middle class. If successful, the no-frills carrier could bring air travel to millions of people who previously could not afford it.

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