Domestic airfares are set to rise due to the high cost of jet fuel following the doubling of Value Added Tax (VAT) on petroleum products to 16 percent.
The cost of jet fuel has hit a high of $1.18 (Sh166) per litre up from $1.1 (Sh154) per litre, with the middle class, who prefer air travel to the road, set to bear the brunt of price increases.
Renegade Air, a domestic carrier which flies the Kisumu, Wajir and Homa Bay routes, says it may increase its one-way tickets by about Sh500.
Airlines normally consider factors such as the dollar rate, landing charges, navigation fee as well as fuel price, which is the major component constituting a ticket cost.
“We are likely to adjust our ticket prices upwards due to the increase in VAT on fuel by 50 percent. This means that a one–way air ticket for example to Kisumu will go up by about Sh500,” said Renegade's sales and marketing manager Patrick Oketch.
Freedom Airline Head of Finance Abdifatah Mohamed said airlines have been forced to review tickets upwards after the increase in jet fuel price.
“I can tell you that all domestic carriers in Kenya are currently reviewing their ticket prices upwards and this will be passed on to consumers in the coming days,” he said.
“You also need to know that the increase in tax on fuel only has an impact on domestic carriers’ airfare pricing. When we fly outside Kenya, this is viewed as an export, which is tax-free,” he added.
Kenya Airways' budget carrier Jambojet will from this week charge between Sh6,900 and Sh9,400 for a one-way ticket from Nairobi to Kisumu, its online portal shows.
The airline will also charge Sh7,900 to Sh8,900 on a one-way air ticket for Eldoret-Nairobi flights. Before the VAT increase, one-way tickets on the route were priced between Sh6,500 to Sh7,500.
Eldoret usually attracts cheaper fares due to low passenger demand. Flights are cheaper between Monday and Wednesday because of low demand before peaking towards the weekend.
Passengers on the Jambojet Mombasa-Nairobi flight are paying up to Sh15,100 on Thursday, with the lowest fares on Nairobi-Mombasa at Sh9,400.
Flights to Mombasa have traditionally been higher due to passenger demand.
Airfares are also determined by the time of travel with morning and evening flights tending to be expensive compared to afternoon planes.
The price increases come at a time demand for air travel in Kenya is at its peak.
