State agency nets Sh8 billion from surge in aviation activities

The Jomo Kenyatta International Airport terminal 1C. The Kenya Airports Authority projects growth in passenger numbers. [Edward Kiplimo, Standard]

The State received close to Sh8 billion in the last financial year as a result of increased use of its airspace, boosting dwindling revenues.

A Treasury document dated June 2019, shows that the Transport Ministry raised Sh7.7 billion from aviation fees and air navigation charges.

This comes at a time when cash-strapped Kenya Airways has decried the high regulatory fees and taxes, which the carrier says have contributed to its losses.

Kenya Civil Aviation Authority (KCAA) Director-General Gilbert Kibe attributed the rise to more business in the local civil aviation sector. "There were new airlines that started operating while the existing ones received more businesses," said Kibe. Treasury's estimates of revenues and grants for the Financial Year 2019/20 shows that the State expects to collect Sh8.1 billion in the current Financial Year.

Between July 2018 and June 2019, consumption of jet fuel increased by 40 per cent to 682 tonnes from 485 tonnes in the previous financial year.

A dramatic increase in the number of tourists flying to Mombasa contributed to a 12-fold increase in the consumption of aviation gasoline last year. Data from the Kenya National Bureau of Statistics (KNBS) shows that intake of aviation gasoline which is used to propel small aircraft went up to 18,830 tonnes.

This was a staggering 1,217 per cent increase from the 1,430 tonnes consumed in 2017.

Captain Kibe also observed an additional revenue stream for KCAA, which also pocketed part of the air service charge fee. The fee is normally charged on every international ticket, and shared among Kenya Airports Authority (KAA), Kenya Tourism Board and now KCAA.

There have been complaints of high charges which account for up to 24 per cent of airfares in Kenya.

Airlines have to pay $50 (Sh5,150) as departure tax in addition to landing and navigation fees. There are also parking fees, aircraft handling charges and en-route charges.

Kenya charges a navigation fee of $819.99 (Sh84,357) and a landing fee of $1,750 (Sh180,250) on Boeing 777-300ER. There are also landing charges which are applied according to the weight of the aircraft, with those weighing over 300,000 kilograms attracting $130 (Sh13,000).

Those weighing less than 1,500 kilograms pay $10 (Sh1,000).  

Exemption from paying landing fees was one of the reasons Kenya Airways wanted a partnership with KAA.

The industry also faces 16 per cent Value Added Tax on tickets and spare parts in Kenya and jet fuel tax. During the period under review, the Ministry of Transport also collected Sh1.9 billion as agency fees.