Kenya’s aviation sector needs inclusive carrier incentive for tourism growth

In 2016 the Kenyan government unveiled a Sh1.2 billion Charter Incentive Programme (CIP) which aimed at subsidising the cost of tourists arriving by charters into the country.

The main purpose of the CIP was to stimulate demand for destinations in Kenya by introducing new charters, while encouraging existing charters flying into Kenya to increase their route frequencies.

It further served as a reward for charter airlines that make long term capacity growth commitments to bring tourists to experience Kenya’s beach product. Under the CIP, all tourist charter aircrafts with passengers terminating at Moi International Airport Mombasa and Malindi Airport were expected to enjoy no landing fees for a period of two and a half years, as well as a passenger subsidy of $30 per seat filled by international passengers who terminate or disembark in Kenya over the same time period.

In order to benefit from the CIP, charter airlines were required to ensure that a minimum of 80 per cent of the passengers brought in by any charter airline must be terminating in Kenya and they must commit to operate the Kenya route for a minimum of at least two consecutive years.

The focus was placed on holiday destinations and seats were usually booked through tour operators as part of a package. In 2014, the coastal region suffered a major blow with the withdrawal of charter flights from the United Kingdom following a travel advisory imposed by the British government.

Several other continental European charters followed suit. A charter airline that operated once a week would approximately bring in an average of 300 passengers thereby contributing approximately Sh1.65 billion in tourist spend. From the launch of the CIP in January 2016 and until its untimely demise at the end of 2017, a dismal amount of only 5 charter airlines qualified for the advertised incentives.

Tourism travel trends thus reveal that the tourist charter flight model is rapidly on the decline. In 2007, the segment’s share of all flights was 6pc. Ten years later, this share had dropped to about 3pc.

The scheduled airlines and low-cost airlines segments have absorbed a substantial part of the charter market in recent years as more people are planning their holidays through online booking channels rather than relying on conventional travel agencies. In response, many former charter operators have started selling individual seats as part of their transition to operating as low-cost and scheduled flights.

The National Treasury, the State Department for Planning, and the Ministry of Transport and Infrastructure should reinvent the CIP as a ‘Carrier Incentive Programme’ making it carrier centric rather than charter centric. This would include prevalent national and local carriers as well as any prospective scheduled and low-cost flights.

Every Kenyan carrier (irrespective of national or local) should be eligible to benefit from such a programme, if they meet the requirements of the programme which can be set by the relevant ministries. This new and improved programme would further strengthen our destination’s brand visibility as a whole if it were to be broadened to also incorporate a destination marketing support in conjunction with the Kenya Tourism Board (KTB). This would benefit the country and tourism far more than only the waiver and the pay-back model.

This expansion of the Kenyan skies would result in the national carrier bringing in international travellers (both for business and pleasure), who then have the flexibility to choose from various other local airline operators to explore the country. The various counties can only stand to gain from the implementation of such a programme, be it in the form of an increase in the revenue for airports and airstrips or creating much needed healthy competition between local airline operators and the national carrier or assisting in creating employment.

Whichever way you look at it, such an inclusive programme would only result in economic growth which would go a long way in helping us attain Kenya’s Vision 2030 “towards a globally competitive and prosperous nation”.

(Kamani is Managing Director, Diani Reef Beach Resort & Spa)

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