September 25, 2019 / 7:49 PM / a month ago

Kenyan budget carrier Jambojet to double passengers in three years

NAIROBI (Reuters) - Kenya’s first low-cost airline, Jambojet, plans to more than double its annual passengers to 1.5 million in the next three years by opening new routes in East Africa and flying planes more often, its chief executive said on Wednesday.

The no-frills carrier, founded by Kenya Airways (KQNA.NR) five years ago, ferries 700,000 passengers a year within Kenya and to neighboring Uganda after an aggressive expansion aimed at first time flyers who would normally take a bus.

Like budget carriers in Europe and South Africa, Jambojet passengers only pay for seats. The airline charges extra for services such as baggage and meals, allowing ticket prices to compete with buses and trains.

“People like this model, they are flying this model,” Allan Kilavuka, Jambojet’s CEO, told Reuters in an interview.

The airline has grown traffic by a compounded annual rate of 25%, giving it a modest return, Kilavuka said, although he declined to give figures.

Except for Ethiopian Airlines, most bigger carriers in the region are loss-making, including Kenya Airways, which parliamentarians voted to re-nationalize in July.

“We are profitable,” Kilavuka said. “The margins are very thin given the costs that we have to incur, and the challenge is to maintain this profitability because the industry is volatile.”

Jambojet operates six De Havilland Q-400 planes and plans to get two more by year’s end, Kilavuka said.

It flies to five destinations in Kenya and to Entebbe in neighboring Uganda and plans to start flights to South Sudan, Rwanda, Tanzania, Somalia, Democratic Republic of Congo and Comoros.

Jambojet CEO Allan Kilavuka speaks during an interview with Reuters at his office in Nairobi, Kenya. September 25, 2019. REUTERS/Njeri Mwangi

The carrier also wants to boost daily usage of its planes from eight hours to 10 or 13 hours, he said, a move that would give it excess capacity.

Air travel in Africa is growing at about 6% per year, the CEO said, but from a low base.

“We need to scale up but that needs to be done responsibly so you don’t overheat,” he said. “It (the budget carrier model) is more manageable. It is easy for you to flex and change.”

Editing by Katharine Houreld and Emelia Sithole-Matarise

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