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Kenya Airways Bets On Middle Class To Revive Low Cost Subsidiary

Kenya Airways Bets On Middle Class To Revive Low Cost Subsidiary

Written by Difin Mulupi | From How We Made It In Africa

Kenya’s largest airline is betting on the country’s expanding middle class and recent economic growth to drive the success of its new low-cost subsidiary a decade after it was forced to shut down a similar venture.

Low-cost carrier Jambojet, a subsidiary of Kenya Airways, is set take to the skies on April 1, flying from Nairobi to three major towns in Kenya (Mombasa, Kisumu and Eldoret). The airline’s entry is likely to shake up the budget airline market given that it is offering one-way tickets for US$33.

A lot has changed in Kenya in the last 10 years since Kenya Airways was forced to abandon Flamingo Airlines. Today more people have access to the internet and can make online bookings, the middle class is growing, the private sector has expanded and smaller towns are becoming business hubs.

Jambojet CEO Willem Hondius told How we made it in Africa that Kenya Airways’s re-entry into the budget airline market was necessitated by demand. He says Jambojet will “attract a lot of new customers who were not flying before”.

Hondius cites the case of businesspeople who frequently travel to Kenya’s coastal city of Mombasa to transact business at the port. If they travel by bus they would spend two days on the road – Kenya recently instituted a night travel ban on all public transport vehicles.

“Now they can fly up and down in one day. They can grow their business by being there more frequently. Of course, the people who pay KSh.700 ($8) for the bus will not take the step towards flying because that [price] gap is too big. Their first aim is to move from the ugly bus to the nice luxury bus. The people travelling on luxury buses can start flying. There are also people who fly, but only once or twice a year and now they can fly much more frequently.”

Read more at How We Made It In Africa