Jambojet posts profit in second half results

Jambojet, Kenya Airways’ domestic low-cost carrier, posted a a Ksh57 million ($547,000) profit in its second half performance, from a Ksh237 million ($2.3 million) loss recorded in the same period last year, officials said.

“We fine-tuned our business in terms of frequencies, destinations and pricing strategy and this lowered our unit cost by far,” said Willem Hondius, Jambojet’s chief executive, in an email.

Jambojet has cut down on cabin crew and free services on board with passengers taking care of their own luggage and paying for the food and drinks.

Analysts said while short distance passengers are likely to go for the cheapest options the airline needs a long term strategy.

“Low pricing is a good strategy but it could be picked up by a competitor Jambojet’s model should therefore lean towards identifying lucrative routes and full capacity utilisation,” said Einstein Kihanda, chief investment officer at ICEA Asset Management, adding that good management and relationship with staff and travel agents remain key to the carrier’s success.

Similar routes

Jambojet offers return flights from Nairobi to Mombasa five times a day, the Nairobi-Kisumu route twice daily and the Nairobi-Eldoret route 10 times a week.

Other destinations include Malindi, Ukunda, Eldoret and Lamu. Its major competitor, Fly540, flies similar routes apart from Ukunda in addition to South Sudan and Zanzibar. To maintain the profitability momentum, Jambojet is planning to fly more routes.

“We are looking at opening additional domestic and international routes. We will disclose those when the time comes,” said Mr Hondius.

Government efforts to expand airstrips coupled with the devolution process are creating opportunities for low cost carriers as more entrants scramble for a slice of the domestic market.

Jambojet is seeing an opportunity to fly close to full capacity on its Bombardier Q400 aircraft which carries 78 passengers.

Among the recent infrastructural projects is the completion of the runway extension at Ukunda Airport by Kenya Airports Authority, which will help boost business and tourism in the Coastal region.

Improved airport infrastructure and connectivity is part of the government’s Vision 2030, with plans to expand airports such as Eldoret, Mombasa, Kisumu, Malindi, and Lamu.

Fastjet Kenya was last month granted an Air Service Licence by the Kenya Civil Aviation Authority and is banking on offering the lowest prices to penetrate the Kenyan market upon final approval.

READ: Fastjet flies back into Kenya’s turbulent skies
A return ticket by Jambojet on the Nairobi –Mombasa route costs a consumer Ksh13,900 ($115) as per last week. This compares with the Ksh16,080 ($134) offered by Fly540 for the same route.

SOURCE: THE EAST AFRICAN