advertisement

Economy

Air ticket sales dip Sh1.5bn on travel restrictions, polls

The Jomo Kenyatta International Airport in Nairobi. FILE PHOTO
The Jomo Kenyatta International Airport in Nairobi. FILE PHOTO 

Air ticket sales dropped by Sh1.5 billion over the past two months following travel restrictions in government and the prolonged election period that has seen cautious travellers reduce cross-border movement.

The Kenya Association of Travel Agents (KATA) air ticket bookings dropped 10 per cent to 1.5 million in September, a month marked by the Supreme Court’s nullification of President Uhuru Kenyatta’s victory over irregularities and street protests against the October 26 repeat polls.

The standoff has frightened investors and slowed growth as consumers hoard their money.

“It is estimated that with average monthly ticket sales of about Sh5 billion, the industry has in the last two months alone lost about Sh1.5 billion in sales as a result of political uncertainty,” said KATA.

“This could rise to over Sh3 billion if the current impasse is not quickly resolved.”

Reduced air travel is likely to hurt airlines such as the Kenya Airways and slow down tourism, which has been recovering following the crippling effects of several travel bans issued in 2014 by key source markets after a spate of terrorist attacks on holiday towns.

Yesterday, President Kenyatta restated his commitment to the October 26 poll.

But opposition leader Raila Odinga called for a mass protest on the election day, deepening uncertainty that has been hurting business.

Monthly sales for business have been falling since June, says a monthly output report by Stanbic Bank #ticker:CFC.

Major international conferences like UNAIDS Global Prevention Coalition Meeting, the 2018 Africa Nations Championship (CHAN) have been cancelled, further hurting the hospitality industry.

Revenue down

Kenya’s revenue collection between July and mid-September fell behind by Sh29 billion as investors postpone projects due to uncertainty over elections.

This forced the government cut non-essential expenditure, such as foreign travel.

This has affected air ticket operators who say travel by top government officials accounted for a significant share of the business.

“Corporates who are the second largest consumers of travel services have also frozen travel only limiting it to crucial travel,” says KATA.

Last month, Kenya lowered its 2017 economic growth forecast to 5.5 per cent due to drought and political uncertainty from an initial 5.9 per cent.

advertisement