Kenya Airways Jambo Jet

[Capt. Bill]

Kenya Airways announced introduction of a low cost carrier into the Kenyan aviation market, Jambo Jet.
The big question is will KQ succeed in this venture considering the fact that there are other low cost carriers in the region for example Fly540
, Jetlink etc...
2. What does this mean for other low cost carriers in the region, will this cause stiff competition in the market n losses to sme carriers?
3. Due to the stiff competition, will airfares reduce relatively so as to have an upperhand over rival carriers?
4. Will this venture increase KQ's lost income to other low cost carriers thereby increasing their profits relatively?
lets discuss this. contribute whatever little you can. will be highly appreciated

[B737NG]

Habari,

Low Cost Carriers. A modern word in our industry. The "Mother" of LCC´s was in the US Southwest, in Europe it was Debonair for example.

How to pay the bills and to whom charge the price? How can I generate more money? How can I reduce my own risk and transfer it to all parties involved?.

A few Companies found another source of generating profit: The employee and the customer. The T&C´s are degraded, the candies are taken away.

The degree of "cutting" costs depends how low it can get. Networks for example are expensive, point to point flying reduces the risk of beeing liable in case of the connection is missed or any other interruption of the journee.

You need also Customers who accept the degree of no frills. Some LCC´s still serve some goddies for free, some charge for it and some are so lean they just sell the seat and save the costs for all logistic efforts in the back.

Cabin Crew, a new meaning = Cabin Crew cleans the Cabin during the turnaround, the scheduled time can be as short as 25 min as there is nothing needed except Fuel and paying PAX who bord the plane. Between on block and off block the support is minimum, just logbook, walkaround, unloading, deboarding, refueling, boarding and ready again, off you go. High utilisation of the Airplane, 14 to 16 hours per 24 hours. Minimum ground time, maximum airtime. The Administration behind is lean to the bones. Crews have to pay for the Uniform, Crews pay for medicals and SIM-Checks. The crew get a small amount of money for doing administrative tasks. So costs are saved in the administration as well, you do not need too many office people on the payroll.

The traditional Airlines have the difficulties to sustain that, they have induced costs thru networks, thru alliances. Fix costs are usually higher then at any LCC due to huge administration behind. It also depends where it is, the labour costs of each country are diffrent. There are Airlines who can afford alot of staff as the wages are low, they can generate more profit or beeing more competitive, depends on the market situation again.

You have to put many lights onto the spot to see it from diffrent views. I also look forward to more replies and a good discussion here in the forum.

Fly safe and land happy

NG

[Vc10Tail]

My personal view is that:

K.A. (KQ is IATA code guys! or does it mean KiQuyu Airways?)Jambo will not take off any time soon.Why?

1)Lack of or poor of manpower planning and dire shortage of manpower at K.A.

2)Lack of facilities planning.I am not convinced there is enough hangar and apron space to accomodate further fleet expansions of the scale we have heard about.You might wonder...Why did One-Jet-One flame out?

You can not market two different brands simulataneously.Operating economics and strategies widely differ.Airlines do not operate as Dr.Jekyll and Mr.Hyde. It might do so in disguise like Fly Dubai under the umbrella of Emirates but attempts will be made to make it look like very distant cousins.

In any case if JAMBO does get launched, the likes of Fly540 (unless Fast jet takes off ...FAST!!!!) Jetlink , etc will see their demise.To operate competitively LCC need network mass and economy of scale, and financial prowess.Only K.A. can provide that amunition.

If Jambo jet does get launched, I am sure due to new fleet and standards as well as previous organization experience at K.A. that it would provide a superior package and staying power relative to the competition...whose safety standards and financial prowess are known to be weak.

Kenya is too small an economy to hold such a huge pool of airline predators.In the airline business economies of scale and scope is the ultimate king of the aero jungle.

For the smaller scale LCCs to be more competitive, fleet and network products have to vastly improve.Otherwise they will just be left like vultures to pick on the bones by K.A.Safety should not be compromised, as is commonly so, to benefit economic efficiency.Heard of "Value Jet" in USA?

Overall, the consumer will ofcourse benefit from this...not necessarily by continual reduction of air tariffs, but improved products and scheduling.Certainly there is room for LCC expansion, but not so much at regional level, more at international level covering segments like NBO-DUBAI,CAIRO,LAGOS,JO-BURG.Even long haul LCC worth a try to high density routes like Far East.

For LCC to thrive, it needs a genuinely liberal Air Transport policy and legislation that empowers genuine LCC ventures.Is our KCAA and MOT able to deliver that? Might Jambo become another white elephant like One-Jet?

My two cents!

[wisecaptain]

Anyone know the latest????
With Fast jet up and running in November any chance this KQ offshoot will meet the challenge to stem the loss of pax revenue which is sure to follow if they dont?????