FASTJET COO MEETS WITH ATCNEWS.ORG ON THE SIDELINES OF #WTMA18
(Posted 20th April 2018)
Fastjet’s Sylvain Bosc yesterday met with the Publisher of ATCNews.org to discuss aviation in general and Pan African LCC Fastjet in particular.
Here are some select questions asked and answers given:
Q: You joined Fastjet about a year ago from South African Airways. How did you find the transition from a full service Skytrax 4 star airline to a low cost carrier.
Low cost aviation is a very exciting and fast paced industry and vastly different from traditional carriers in terms of business case, agility and corporate culture. Fastjet is a fairly small, privately owned airline with a very flat, reactive and agile organizational structure, which makes it a very exciting place to work.
Q: Fastjet operates presently in Tanzania, Zimbabwe and of late also in Mozambique, three different countries with distinctly
different operating environments, very different business cultures.
How does a COO deal with such challenges.
I’ve been fortunate enough to work in different airlines in several countries and continents – I find that there are local differences obviously, but those are not as significant as one might think, and eventually the same business fundamentals apply regardless of local culture or geography : you need to sell your seats at the best possible price and for this you need to deliver consistent, reliable services to match clients’ expectations.
Q: Over the past year did Fastjet undergo a complete fleet exchange
from the previous A319’s to smaller Embraer E145 and E190 jets.
What were the reasons for these changes and what advantages does
Fastjet see, now that first results are in.
I am a big fan of the Airbus 319, it’s a great aircraft; but for our business segment in Africa the A319, configured with 144 seats, was simply too big. Load factors were very rarely above break-even point, which led to excessive discounting and unsustainable losses. The new management team, tasked with the airline’s turnaround, decided to start by right-sizing the aircraft type, introducing 100-seaters in Tanzania and 50-seaters in Zimbabwe and later Mozambique. Although our unit costs obviously increased, our losses have been greatly reduced to the point that we are now in a much better situation and positioned for growth.
Q: Following the changes in Fastjet’s jet fleet will very soon ATR72
turboprop aircraft be introduced. What was the principal driver for
that decision and what will be the major benefits for the airline in
terms of destinations and operating cost.
In most African countries there are runways that can’t be served by jets (Arusha for example), or stage lengths that are so short that they can’t be served profitably and at a low cost with jets (Dar to Zanzibar or Mafia Island for example). We decided that, to expand our product offering in Tanzania, we needed to operate turboprops, and at sea level the ATR72 was the most cost-efficient aircraft in the market. We’re very excited to introduce this aircraft in Tanzania as soon as we have cleared the related administrative requirements. The travelling public will then be able to benefit from even more affordable fares and a larger network
Q: Having multiple aircraft types on the fleet also forms a major
departure from LCC doctrine that in order to be viable a low cost
airline has to operate just one aircraft type. How do you respond to that.
Yes, that’s indeed a major departure from a pure LCC model. But to really achieve economies of scale you need to have the ability to deploy your assets freely and easily; for example Vueling can move an aircraft from a Toulouse base to a Stuttgart base in no time. JetBlue doesn’t need anyone’s approval to move an asset from the East to the West coast of the USA. Africa, on the other hand, is a fragmented market where every country has got its own market potential, geography constraints, civil aviation regulations etcetera. The ATR is certified in Mozambique and Tanzania but not in Zimbabwe. Zimbabwe is a hot and high operation whereas Tanzania is mostly at sea level, etc etc. So, in spite of the advantages that a single fleet would bring, there isn’t such a thing as a “one size fits all” aircraft for all African markets. In fact, you see that Azul, another successful hybrid LCC in an emerging environment, came to the same conclusion although it operates in one big market, Brazil, compared to many smaller African markets like us.
Q: Zambia at one stage was to become another Fastjet ‘country’ –
what happened to those plans.
Our Zambian operation was ready to start but put on hold as the new management team determined that the A319 was too large for this market. That was certainly the right decision and we avoided major losses. We remain interested in the Zambian market (we currently fly between Dar and Lusaka) and will consider deploying our assets there if and when we find the right local business model.
Q: After the airline moved headquarters from London Gatwick to
Johannesburg there have been persistent suggestions that Fastjet
may enter the South African market. Are you able to shed any light
on that?
The South African market is evidently quite attractive because of its significant size. It’s also extremely competitive and in many cases over-supplied. You can’t succeed in South Africa unless you have a very carefully designed plan, significant resources from the outset and perfect execution of your business case. The South African market is definitely on our radar, but any market entry requires substantial preparation and alignment of appropriate resources.
Q: Fastjet describes itself as a Pan African LCC. Operating out of
three countries and flying presently to five – Zambia and South
Africa included – what does the future hold to justify the Pan
African label.
We are the only low-cost airline group in Africa that can be labelled as “pan-African”, besides full service airline Ethiopian which also operates in Malawi and Togo. We are very proud of this and want to add more African countries to our portfolio in the next few years to fulfil our ambition of becoming the leading pan-African brand, like MTN in the telecom sector for example.
Q: Where do you see Fastjet positioned in Africa in the short, medium
and longer term.
We wish to continue growing and unleashing the African aviation opportunity, prudently and profitably. There is no other continent with more potential for growth than Africa and we are well-positioned to contribute to, as well as benefit from, the African aviation opportunity.
ATCNews: Thank you Sylvain for your time and the very interesting talk and your forthcoming responses.
