How Fastjet Controversially Acquired ASL after the Intervention of Muhoho Kenyatta

Fastjet has announced that it is finally ready to launch in Kenya though the aviation regulator denies that. The British owned low cost carrier is set to launch in the country to compete with Jambojet and Fly540. But the main competition is going to be Jambojet as Fly540 is known to target a unique clientele in the domestic market which doesn’t mind a little mark-up over low cost rates to get assured service.

However, questions are being raised on the manner in which the carrier was granted the Air Service License which will enable it to operate domestic flights. The board meeting which saw the airline being granted the said license had key personalities missing.

Some of the people who didn’t attend the meeting are Head of Licensing Committee and the KCAA Chairman. Considering that Fastjet Tanzania CEO, Jimmy Kibati, and Muhoho Kenyatta are close associates, it was not surprising to hear that Muhoho personally ensured that Fastjet go the ASL without the approval of the KCAA board.

Most interesting bit is the manner in which the license said to be held by Fastjet was granted. The letter which the airline is using to announce its impending launch was written by the Head of Licensing at KCAA, , but under the personal supervision of President Uhuru Kenyatta’s brother and business arm, Muhoho Kenyatta.

Fastjet Kenya ownership documents reveal something else. The company has also raised around 50 million British pounds to launch locally. The money will be used to boos operations.

Fastejet Kenya Limited Ownership

But the true intentions of the airline is in question as it did a complete about-turn in Tanzania and opposed the bailout of Precision Air when the Tanzanian airline needed it most. Fastjet launched in Tanzania as a low cost carrier but after killing Precision Air, it raised it’s fares more than ten times. The one way trips which were initially going for Tzs 41,000 are now going for more than Tzs 400,000.

The move forced the Tanzanian aviation regulator, TCAA, to order Fastjet to reduce its fares. With its strategy of launching as low cost and immediately raising rates when it has the monopoly, the carrier has been making losses consistently that analysts wonder if it will ever break even. Some local aviation enthusiasts have even suspected that Fastjet is being used by moneyed expensive carriers to kill African airlines.

Pundits in the aviation industry have intimated that Fastjet wanted to use its illegally acquired Air Service License in Kenya to manipulate its shares in the London Stock Exchange. airline used the letter to announce the impending launch, rallying its own shares at the London bourse.

The airline which has previously been accused of tax evasion in UK and Tanzania is still confident of launching in Kenya soon. It will eat more into the Jambojet market as the KQ operated low cost carrier faces a burden of earning a return on the more than Ksh 12 billion it has invested. Jambojet is also paying an expensive $ 1.5 mrillion fee each month to UK based DAC aviation to operate some of its routes.

The announcement that Fastjet obtained an Air Service License was greeted with shock in the East African aviation industry that with a few phone calls, KCAA moved with speed to deny the announcement of Fastjet, explaining that the industry regulator will decide on the ASL within the next three weeks.

Fastjet wants to be the Southwest, Ryanair or AirAsia of Africa. With only South Africa’s Mango (focuses on domestic market) being the only low cost carrier in the continent, Fastjet will get to face lots of headwinds as it is seeking the back root of trying to undercut competition to make an impact. The airline is already flying to Entebbe, Lilongwe, Johannesburg and Zanzibar from Dar-es-salaam.

Fastjet recently raised over Ksh 7.7 billion from private investors which it plans to use in its expansion in the continent. The airline first made an attempt to enter the Kenyan airline through the Fly540 acquisition but the agreement later degenerated into an ugly fighting forcing each entity to go its way.

The ASL is to enable Fastjet Kenya to commence the application process for an Air Operator Certificate which will allow it to operate domestic flights within the country.

However, an in depth review of Fastjet Kenya’s planned safety management system, operational manuals and structures, and technical capability will determine if the airline will be granted approval to fly in the country.

Both Kenya Airways and African Safaris have directly written to the Kenya Civil Aviation Authority opposing the entry of Fastjet into the country but tides seems to be changing. KCAA has not publicly revealed the complaints against Fastjet by the two airline but the UK carrier was invited to respond to the allegations.

KCAA also issued a statement in June indicating that it couldn’t process the Fastjet license application as its board was not fully constituted.