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Why government is right in not opening Kenyan skies just yet

 Kenya Airways plane taking off from the JKIA,  Nairobi, in September 2019. [Edward Kiplimo, Standard]

According to recent media reports, “the government says it will not yield to pressure to liberalise Kenyan skies and to give foreign carriers easy access to different airports within the country.”

This decision has elicited mixed reactions. There are those who approve of this; who appreciate that Kenya’s airspace is a valuable resource that must be used for the benefit of citizens.

Then there are others who have received this decision with consternation, who argue that open skies would ramp up the number of visitors to the country. They aver that competition is good and that protectionism is needless.

No doubt, the liberalisation of airspace and the facilitation of competition is good. But only when there is a level playing field. The question that arises then is whether Kenyan carriers operate on a level playing field. The answer is that they do not. The odds are stacked against local airlines and tilt heavily in favour of foreign carriers in the following ways.

First, local carriers are subscale. They have fewer planes relative to many foreign carriers. This makes the unit cost of operating them higher than bigger airlines. They do not benefit from the same economies of scale. The Covid-19 pandemic taught the world that having a national carrier is a national security matter. Local airlines must therefore be allowed to grow organically to the point where they can match their international counterparts.

Second, the cost of operating an airline in Africa is higher than in Europe, America or the Middle East by more than 40 per cent on account of higher fuel costs and intra-Africa taxes. For instance, the passenger charge for a traveller within Europe is a mere 6 US dollars whereas it is 110 US dollars within Africa. The Single African Air Travel Market is an initiative that seeks to remove all restrictions within the African continent for African carriers to thrive. Kenya is a signatory to this initiative. Once other countries on the continent come on board, African carriers will then compete effectively against their foreign counterparts.

Third, a lot of foreign competitors are backed by their governments. This is both at the policy level and through subsidies.  For example, the US has a “fly American” policy that precludes flying on a foreign carrier using funds from taxpayers. Policies are also used to protect airlines from competition. Delta, an American carrier, does not fly to Dubai because it cannot compete with Emirates on a policy and subsidy level.

Because aviation is a very expensive business with thin margins, most countries with successful airlines tend to subsidise them heavily. In the last four years, Emirates has received more than USD 4 billion from the UAE government in subsidies. Singapore Airlines received USD 19 billion for post-pandemic recovery whereas American carriers got USD 56 billion from the US government towards the same. Carriers in Kenya have to make do with commercial arrangements and some limited support from the government.

These are the questions proponents of open skies should ask: Would Kenya receive more tourists because of open skies or because of tourist attractions? Would not tourist numbers be ramped up by marketing Kenya as more than just a beach and safari destination?-Mr Khafafa is a public policy analyst

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