MP moves Motion to pull down cost of air travel

An MP has introduced a private member’s Motion seeking to fully liberalise airfares and licence more domestic operators to increase competition and bring down the cost of air travel.

Changamwe MP Omar Mwinyi argues that the absence of a strong regulatory body has left consumers at the mercy of a few operators who are overcharging them.

Mr Mwinyi’s Motion is targeted at Kenya Airways (KQ) which he accuses of colluding with regulators to frustrate the licensing of new players that would benefit air travellers.

“Given that there is no regulatory body in place to supervise and ensure fair opportunity for competition by different airlines to ensure checks on excesses of the airlines; and that a number of airlines that applied for licences to operate domestic flights are yet to get approvals, this House resolves that the government puts in place measures to fully liberalise air fares…to make air travel affordable as a result of fair competition,” reads the Motion.

Mr Mwinyi reckons that Kenya Airways enjoys monopoly in Kenya’s airspace, which it uses to determine fares at will.

The MP argues that the monopoly enjoyed by KQ has made it difficult for travellers to enjoy reasonable prices.

The Motion comes when regional airline Fly540 has petitioned the competition watchdog to investigate KQ’s low-cost subsidiary Jambojet for “anti-competitive behaviour”.

Fly540 told the Competition Authority of Kenya (CAK) that Jambojet’s low-cost tickets have put its business at risk, arguing that the budget carrier’s ownership by KQ amounts to unfair competition for smaller operators.

READ: Fly540 terms new Kenya Airways carrier a monopoly

Jambojet’s tickets are priced as low as Sh2,950 for one-way flights between Nairobi and Kisumu, Nairobi and Mombasa, and Nairobi-Eldoret.
That is less than half the Sh5,540 price that Fly540 charges its customers for commercial flights on the same routes.

Kenya accounts for six per cent of KQ’s sales, meaning domestic operations earned the national carrier Sh6.4 billion in the year to March.

But the Kenya Civil Aviation Authority (KCAA), the industry regulator, dismissed the MP’s claim that it has not licensed new players in the aviation market.

KCAA said the majority of applicants it has recently licensed have been unable to begin operations because of inability to meet the industry’s stringent requirements.

More than 100 licences have been issued to applicants seeking to offer scheduled and charter flights but most have failed to meet key regulatory requirements such as aircraft worthiness, personnel vetting and operation manuals.

“Aviation is one of the most regulated sectors and approvals may take at least two years,” KCAA said, adding that the aviation sector is one of the most dynamic where prices are determined by market forces.

KQ and Fly540 have been the main players dominating the Nairobi to Mombasa, Kisumu and Eldoret routes since the collapse of Jetlink two years ago.

Mr Mwinyi says Kenya Airways has continued to dominate domestic flights and regional routes to the disadvantage of travellers.

International traffic in East Africa grew at an average annual rate of 6.2 per cent between 2001 and 2007.

The MP is supporting his claims of KQ’s alleged dominance with figures showing that the airline provides 70 per cent international traffic through Nairobi compared to South African Airway’s 33 per cent in its Johannesburg hub.

Nominated MP Isaac Mwaura said airfares in Kenya remain beyond the reach of ordinary travellers unlike in Europe where one can do a continental flight from one country to another for as little as Sh3,000 equivalent.

“It’s only recently that private players have come to the local market. Looking at KQ’s shareholding, the government gets very little compared with private shareholders who are taking the larger chunk of the airline’s profits,” he said.

Mr Mwaura said liberalisation of the aviation industry would ensure fair competition and create employment opportunities for young people.