Extend charter flights incentive programme  9th Jul 2018

Tourism is Kenya’s second largest source of foreign exchange after agriculture. In 2017, the industry contributed Sh.120 billion in foreign exchange income, a 20 per cent growth over 2016.

The sector directly supports an estimated 250,000 jobs and an additional 350,000 jobs indirectly. Kenya is a long-haul tourism destination.

What this means is that the direct flight time from our main international tourism source markets to Kenya is over six hours. Mid-haul tourism destinations are those that are over four hours and up to six hours’ direct flight time from the source market, and short haul tourism destinations are those that are anything less than 4 hours’ direct flight time from the source markets.

In January 2016, the Government of Kenya commenced the implementation of a Sh.1.2 billion Charter Incentive Programme (CIP). The objective for rolling out the CIP was to support the recovery of international tourism to the Kenyan coast which has over the years been highly dependent on tourist arrivals by tourist charter flights, mainly from the United Kingdom (UK) and Europe.

A tourist charter flight is an unscheduled flight that is not part of a regular airline routing. The operator rents the entire aircraft and can determine the departure/arrival locations and times.

The focus is on holiday destinations and seats are usually booked through tour operators as part of a package. In 2014, the coast region suffered a major blow with the withdrawal of charter flights from the UK following a travel advisory imposed by the country’s government on several resort locations including the region’s main airport, Moi International Airport in Mombasa. The CIP offers incentives to tourist charter airline operators who make a long-term commitment to bringing tourists to the Kenya coast.

To qualify, the aircraft must land at Moi International Airport, Mombasa, or at Malindi Airport, as well as disembark 80 per cent of the passengers at one of the two airports. Under the CIP, qualifying charter airlines will enjoy a waiver on landing fees, and a passenger subsidy of $30 per seat filled, both valid for a period of two-and-a-half years.

An increase in tourists would not only boost hotel occupancies and safaris tours, but also support the trickle-down effects in the region’s economies. A charter airline that operates once per week brings an average of 290 passengers and contributes approximately Sh1.65 billion in tourist spend.Since the launch of the Charter Incentive Programme in January 2016, to-date, five charter airlines have qualified for the same.

However, tourism travel trends reveal that the tourist charter flight model is rapidly on the decline. In 2007, the segment’s share of all flights was six per cent. Ten years later, this share has dropped to about three per cent.

The scheduled airlines and low-cost airlines segments have absorbed a substantial part of the charter airlines segment market share in recent years as more people rely less on tourism agencies and plan their holidays on their own mainly through online booking channels. 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 CIP came to an end in June this year and I would urge both the National Treasury and Planning, and the Ministry of Transport and Infrastructure to review the programme so as to include current and potential scheduled and low-cost flights as well.

The programme should not be charter- centric but rather one that supports an airline growth strategy. It needs to be an Airline Incentive Programme (AIP). Our national carrier, Kenya Airways (KQ), should also be eligible to benefit from the programme if they commit to meeting the AIP criteria.

I propose that the new AIP be broadened to incorporate a destination marketing support commitment by the airline operator agreed on jointly with the Kenya Tourism Board (KTB), rather than only the waiver and the pay-back model. This would strengthen our destination’s brand visibility as a whole in the source market, unlike the current waiver and pay-back model that is more focused on the charter flight.

Jimi Kariuki, chairman, Kenya Tourism Board.

Source: https://www.businessdailyafrica.com/analysis/letters/Extend-charter-flights-incentive-programme/4307714-4646794-w0ildsz/index.html

 

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