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Why airports agency seeks reduction of departure tax

Kenya risks losing its grip on the aviation industry business to regional competitors, if charges contributing to high cost of flying are not lowered, Kenya Airports Authority (KAA) has warned.

Chief Executive Officer John Andersen referred, particularly, to the airport passenger service charges imposed on passengers departing by air from any airport within the country.

He decried the charge, currently standing at $50 (Sh5,078.50), saying that such taxes have made cost of landing at the Kenyan airports very expensive compared to other airports in the region.

Aircraft parking

In addition to airport passenger service charges, airports also normally charge for runway landing and take-off, aircraft parking, air bridge use and passenger processing.

Andersen who spoke at the 65th East Africa Managers Conference convened by Kenya Institute of Management in Mombasa, said that due to fierce competition, Kenya’s airport market share has dropped from 50 to 30 per cent by end of last year. “We have been losing our market share to other countries in the region, specifically Ethiopia and Rwanda, which have been recording significant growth, because we are so expensive,” he added.

The East African aviation market has in the recent past experienced heightened competition, with Ethiopia and Rwanda expanding their national airports and carriers.Andersen said reducing the current charges for international travel will give local airlines a competitive business edge against rivals in the region.

“If we are able to reduce the airport service charge, we will make it affordable to travel to Kenya, meaning we are going to have more passengers because we are in a very competitive sector,” he added.

“Many of the countries around us charge about $30 (Sh3,046.50) to $40 (Sh4,062), which is reasonable, we at Kenya are at $50.”

Andersen said while Kenya has done well to secure direct flights to the United States, a lot more needs to be done if Jomo Kenyatta International Airport (JKIA) is to fend off the aggressive competition from regional airports and become Africa’s preferred transit hub.

He warned that although JKIA has been ranked as one of the busiest airports in Africa and recorded a significant growth in passenger numbers, increasing from 7.8 million in 2017 to 8.3 million last year, this alone could not ensure a sustained competitive advantage.

Regional competitors

The airport boss said by 2020, KAA will have met some of its targets, by putting in place the requisite infrastructure to outperform the regional competitors.

Part of the mega project is the Sh7 billion facelift of the Mombasa’s Moi International Airport.

“We are working round the clock and by 2020 we will have the Moi International Airport rehabilitation work complete.The work has been slow due to rains that have been pounding the coast region,’’ said Andersen.

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