Competition on Hre-Vic Falls route gets intense

HARARE - National flag carrier, Air Zimbabwe (AirZim), buffeted by high operating costs, old aircraft and intense competition, faces new headwinds on its lucrative Harare-Victoria Falls routes as budget carrier, Fastjet, has launched a service with rock-bottom fares.

With the low-cost carrier increasing its flights between Harare and Victoria Falls by two additional frequencies from July 2, using narrow-body aircraft to the resort destination within just over one hour flying time, the loss-making AirZim is having headaches on how to respond with similar no-frills offerings on the popular and profitable route.

Fastjet, which has received government approval to fly to the prime tourist resort now twice-daily, six days a week, with the only exception on Saturdays, is luring passengers with single-trip fares as low as $149.

By comparison, the national carrier charges $215 for Harare-Vic Falls routes booked in advance.

In expanding its current Harare-Victoria Falls route, Fastjet started providing daily flights between Zimbabwe’s capital and its second-largest city, Bulawayo, from July 20. 

Fastjet launched the route with a special launch fare of only $59, inclusive of taxes, while AirZim charges $120.

According to the company’s chief executive officer, Nico Bezuidenhout, Fastjet has been pursuing this destination route for several years, adding that recent positive developments within the country have made low-fare connectivity a possibility.

This move is expected to end the dominance of AirZim, with the national carrier currently operating two daily flights between Harare and Bulawayo.

Economic analysts said the beleaguered AirZim, which has debts of more than $300m, is likely to feel the impact of its new competition, despite reaching a deal earlier in April to buy four additional second-hand Boeing 777s.

Government bought two Boeing 777 aircraft and an Embraer plane from Malaysia, with the planes leased to the murky and fledgling new carrier Zimbabwe Airways — which has been linked to the family of fallen strongman Robert Mugabe — until AirZim returned to profitability.

The first “Mugabe plane” touched down in Harare on April 11 this year, at a glittering ceremony that was attended by many government officials but the “new” Boeing 777 jetliner has been flown back to Malaysia for A checks and other maintenance works.

Economist Jee-A Van Der Linde of NKC African Economics said from a travel and tourism perspective, increased competition among local airlines is a positive development.

Zimbabwe Tourism Authority (ZTA) statistics show that the country recorded more than 2,4 million tourist arrivals in 2017, 13 percent of which was in the form of air arrivals while the remaining 87 percent arrived using road transport.

Zim tourist arrivals jumped 56 percent between January and March this year. By comparison, during December 2017 about one third 31,1 percent of all travellers into South Africa made use of air transport.

Moreover, a 2015/16 Visitor Exit Survey (VES) report found that less than one percent of visitors made use of air travel within Zimbabwe.

Although travelling by road remains the country’s main form of transport for travellers, 2015 tourist arrivals by air shot up by 42 percent following the introduction of two additional airlines, Fastjet and Fly Africa. These budget airlines have made flying affordable for many travellers.

Van Der Linde said looking at the figures, it is clear that there is ample room for air travel to grow within the landlocked nation.

Even though Zimbabwe does not boast the same level of transport infrastructure than its southern neighbour, it needs to find ways of increasing the country’s market presence. One way of achieving this is by expanding and improving its domestic flight routes, she said.

Zimbabwe’s tourism sector is experiencing renewed interest, according to ZTA chief executive Karikoga Kaseke.

“From December last year, you know what happened in November and in December we were shocked with the jump in tourist arrivals,” Kaseke said in a recent interview.

“We were shocked by the fact-finding missions that came here. I think you saw them in the media, a lot of tour operators, and tour wholesalers from Europe, including from the United Kingdom itself, came here in December to say we are now ready to sell Zimbabwe.

“And if you look at December 2016 compared to December 2017, there was a 48 percent increase in arrivals. 48 percent increase December 2016 to December 2017. 48 percent increase. But we also have the statistics for the first quarter, which is January to March this year, compared to January to March last year. It’s shocking, over 56 percent arrivals! And we are merely saying that we are very, very excited. Basically what we are simply saying is that if you look at the statistics globally, the whole country, not Victoria Falls, not Harare, but the aggregate, its 56 percent increase.”

The ZTA predicts the tourism sector will grow by 20 percent this year amid an improvement in sentiment following the November change of government.

Zimbabwean officials have stated that the tourism sector has grown from a $200 million sector in 2009 to nearly $970m in 2017, but have also acknowledged that the country’s economic challenges have led to the sector underperforming.

This comes as the Reserve Bank of Zimbabwe has announced a $15 million support facility intended for the tourism sector in 2018.

Funding has been a real issue in recent years — the absence of adequate long-term project financing has left the country’s tourism industry with inadequate marketing infrastructure, while facilities have become rundown and outdated. However, like most of the country’s key industries, insufficient funding has not been the tourism sector’s only challenge.

Liquidity shortages since mid-2016 continue to beset the tourism industry. Ordinary citizens as well as international tourists are impacted.

While major tourism facilities and service providers are able to facilitate electronic payments, small curio and arts vendors remain among those most affected by the liquidity crunch.

Comments (1)

this is old news. this report is over a month behind events on the ground. get serious.

Gandanga - 6 August 2018

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