Kenyan-based airline Fly-SAX has launched a new subsidiary to serve the Tanzanian domestic market in a move that puts it in a head-to-head competition with Kenya Airways affiliate Precision Air.

Fly-SAX expects its Tanzanian subsidiary to start operations in the second half of the year, operating small seater planes.

The airline, which is awaiting regulatory approval, is looking to tap into the growing demand for aviation services in the vast country competing with low-cost carrier Fastjet and Precision Air, which is 41 per cent owned by Kenya Airways.

“We are launching a new airline to meet the ever-increasing demand for low-cost, efficient and safe air travel within Tanzania from the country’s own citizens as well as international tourists visiting the country,” said Don Smith, founder of Fly-SAX and Fly540, a Kenyan-based regional carrier.

The airline has appointed Brown Francis as general manager of the Tanzanian outfit. He joins Fly-SAX from Fastjet, where he was director for industry affairs for Tanzania.

The move comes just as Fastjet announced the hiring of a KQ manager, Jimmy Kibati, to run its operations in Tanzania and spearhead its expansion in the region.

READ: Tanzanian rival taps KQ executive

Increased economic activities and tourism have led to increased demand for aviation linkages in Tanzania, especially in the north where the country has a rich mining industry.

Fly SAX was formed in 2010 when it bought out the defunct East African Safari Air Express, taking over its equipment and routes.

Revised data

The launch of new airlines as well as investments by other African carriers including Kenya Airways, Ethiopian Airlines, South African Airways and RwandAir is expected to boost the continent’s industry profitability in 2014, according to industry agency International Air Transport Association (IATA).

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In recently revised statistics, released Wednesday, Africa is expected to post a profit of $100 million compared to similar losses recorded in 2013.

“Economic growth and network development by a handful of African airlines is leading growth. But profitability is far from being evenly spread across the continent,” said IATA director-general Tony Tyler.

The aviation industry is expected to report a profit of $18.7 billion, a downward revision from an earlier forecast of $19.7 billion. The driver of the downward revision is due to higher oil prices.

“In general, the outlook is positive. The cyclical economic upturn is supporting a strong demand environment. And that is compensating for the challenges of higher fuel costs related to geo-political instability,” said Mr Tyler.

Business Daily