“First we want to establish, be sure that everything works because every startup might have some teething problems here and there. We want to iron out those first, stabilise and then, after eight to 12 months, we will start looking at new destinations.”
Why this will work
Hondius explains that the success of a low-cost airline depends a lot on the economy, the nation’s middle and upper classes and the airline’s ability to be “fair and strict on price control”.
“Then you should have, as we call it, price elasticity which means that if you drop the price, demand goes up. I give a counter example that if you fly to Juba there is no price elasticity because somebody who needs to be in Juba only goes there because he needs to be there, not for fun. So if you go up with your price he will pay, if you go down he will pay but you will not attract more passengers.”
While the number of budget airlines is increasing in Africa, Hondius says it will take a while before the model is fully adopted across the continent because “some markets are simply not ready”. Not so for Kenya, he says.
“In Kenya you see that a lot of potential traffic is from people who like to fly but it is simply too expensive. You see so many people travel up and down to visit family and friends and attend weddings and funerals. There are so many occasions when people want to fly. The only thing is you just have to make it affordable. That makes Kenya attractive to a low-cost carrier.”
Competition is stiff
While consumers are excited by the $33 tickets, Jambojet’s competitors are not very pleased. Fly540, an existing low cost carrier, has expressed concerns that the entry of Jambojet would undermine the industry and lead to monopolisation by Kenya Airways.
Other than existing operators, Jambojet also has to contend with the potential entry of international players who find the Kenyan market attractive. The “stiff competition” that could ensue, Hondius says, “could make things a bit difficult”.
“It depends on how many passengers want to fly because if they are too few then we start fighting and then it’s a matter of who is the strongest and smartest. In Europe you will see there are not many low cost airlines flying together on the same route. They avoid each other because they know we are fighting with the same weapons. You have to fight very smart otherwise you lose the game.”
As it prepares to make its first commercial flight in two weeks, Jambojet’s challenge is to ensure everything is ready, not too early, but at the right time.
“If you have your aircraft too soon you already start paying without earning.”
Hondius notes that “getting an airline flying is very complicated”.
“When you [want to] fly you buy a ticket, you go to the airport, you check in, you go up to buy your perfume [and] you fly. It is easy. But there are so many things you have to do behind the scenes to get an aircraft into the air in a reliable and safe way. There are lots of regulations so you cannot fiddle around. Everything needs to be properly done.”