EasyJet founder plans low cost West African airline


The founder of low cost carrier EasyJet, Stelios Haji-Ioannou, is planning to invest US$500 million in a low cost airline headquartered in Ghana’s capital Accra.

“We could link Ghana to 10 or 15 different countries in West Africa,” said Ed Winter, former chief operating officer of EasyJet and a member of the management team of Stelios.

During an interview in Accra on Monday, he told Bloomberg that the team is there to conduct studies into launching the new airline, which would be called Fastjet. “We are looking at 15 aircraft with an investment value of US$500 million.”

Fastjet would fly around five million passengers a year in the West African region.

Stelios will soon announce the results of a feasibility study being done for Rubicon, a cash shell which raised 9 million pounds in December to fund the launch of Fastjet. The Financial Times reports that the study is expected to recommend that the new airline link around six West African countries to Accra.

If Fastjet works out, it will eventually be expanded across the region to become the first pan-African low cost carrier, based on Easyjet’s model, sources close to the study said.

Geoffrey White, CEO of Lonrho Plc, which operates the East African low cost airline Fly540 and which has a 12.7% stake in Rubicon, said he is looking to potentially partner with Stelios in its African operations.
“There’s a very serious plan to make Rubicon into a very serious low-cost carrier,” said David Lenigas, a Rubicon board member and chairman of Lonrho.
“One of the attractions is that West Africa is very poorly served other than with national carriers that don’t have the proper models to do regional low-cost service,” said White.

In December, Rubicon received exclusive branding rights for Fastjet from EasyGroup for 12 months in exchange for a payment of 480 000 pounds, a 5 per cent stake in the company and further royalty fees, the Financial Times reports.

Recently there has been enormous investment in West African airlines. The region has some of the world’s fastest growing economies – the International Monetary Fund projects that Ghana’s economy will grow 13.5% this year. The International Civil Aviation Organization expects Africans to fly 8% more miles in 2012 and 8.3 % more in 2012, making the continent earth’s fastest-growing for air travel behind Asia and the Middle East. And according to Airline Business magazine, 74% of intra-African routes have no more than one daily flight while around half of African city pairs are underserved.

Consequently, Ghana has attracted other new airlines, including Starbow, which launched domestic operations on September 26 last year using two BAe 146 passenger jets. Starbow recently finalised the lease agreement for two more BAe 146s, which will be delivered in May. The Ghanaian airline is expanding its route network amidst rapid growth.

Starbow said passenger numbers have increased overwhelmingly since it commenced operations. The airline currently serves Kumasi with 16 flights a week, Tamale with 7 flights a week and Takoradi with 5 flights a week.

Regionally, Starbow plans to offer direct air services from Accra, Ghana to capital cities of neighbouring countries in the second quarter of this year namely, Abidjan in the Ivory Coast, Ouagadougou in Burkina Faso, Monrovia in Liberia and Cotonou in Benin.

The Ghanaian-German Economic Association (GGEA) this month reported that the airline industry will have a busy year in Ghana. The certification processes for Eagle Atlantic, NHV Aviation Ltd, Pison Airways Ltd and Africa World Ltd, are expected to be completed early this year.

Meanwhile, British Airways is set to start direct flights between Accra and the Spanish Capital Madrid by June, in partnership with Iberia. Emirates Airline is also set to introduce seven new passenger routes this year to complement five new routes introduced in 2011. This will bring the airline’s routes to a total of 114 destinations in 67 countries.

Two new international airlines whose licences were approved last year – Tap Air and Royal Jordanian Airlines – as well as Africa World Airlines, would either operate scheduled passenger or cargo services and intensify their operations this year. Africa World, founded by Ghana’s Togbe Afede XIV, plans to offer the same flights as Starbow, but targeting first-time fliers, says Chief Operations Officer Sean Mendis. “If you make travel easy for them,” Mendis says, “one of the first things people like to do – as a sign of their freedom, as a sign of their prosperity – they want to get on a plane, visit some family, do some more business.” The airline will use new ERJ 145 aircraft.

Air Namibia took delivery of four A319-100 aircraft last year to boost the company’s regional operations, including its new business model of Accra-Windhoek direct service.

Although there is much activity in Ghana’s aerospace sector, there remain barriers to entry, such as high aviation taxes and high fuel costs. Other challenges include poor infrastructure, high ticket prices and crashes – several Ghanaian airlines are blacklisted by the European Union and are banned from European airspace over safety concerns.