The Kenya Airports Authority (KAA) generates a majority of its revenue from landing and parking fees by aeroplanes in Kenyan Airports. This money is used in the upgrade and maintenance of airfields in the country to the required international standards.
In 2011, the government introduced VAT on airport fees as contained in the Finance Act, increasing the cost of landing and parking fees at the Jomo Kenyatta International Airport (JKIA) and other airlines in the country, which had been one of the cheapest fees compared to other regional airports including those in Johannesburg, Harare, and Khartoum among others.
As a result, the fees have helped elevate Kenyan airports to world-class standards as recognised by various international bodies.
While the increase of airport fees was a move welcomed by the state and relevant authorities, a number of local carriers protested the move, arguing that it would make it difficult for them to maintain and operate their aircraft while facing competition from other international or regional carriers.
According to KAA, the landing charges are based on the maximum take-off weight of the aircraft. Reportedly, there are at least 23 international airlines with weekly and daily scheduled flights to KQ’s hub of Jomo Kenyatta International Airport.
As of December 2020, large aircraft parted with an average $25(Ksh2,772) as daily parking charges at airports while landing at a facility such as the Jomo Kenyatta International Airport costs at least $580 (Ksh64,327 ) during the day and an average $700 (Ksh77,647) at night.
Small aircrafts parked at an average $15 (Ksh1,663) per day while it cost them between $220 (Ksh24,400) and $265(Ksh29,391) to land, depending on the time of the day or night.
A report by Business Daily revealed that local airlines such as Jetlink, Airkenya and Fly540 had their landing charges for their midsized planes increased from Ksh78,720 to Ksh91,310 with parking fees going up to Ksh3,750 from Ksh3,200.
“Currently, we are not paying VAT on landing and parking, but this going to be terrible for us. The increased fees will hurt us (domestic carriers) most,” Nixon Ooko, then Fly 540 operations manager was quoted as saying.
Some of the charges at airports include; landing and parking, fuel, ground handling, navigation and catering. Oil companies regulate Fuel costs while handling charges are controlled by the ground handling companies operating within the airport.
Equity Bank CEO and Vision 2030 chairman James Mwangi in 2011 urged KAA to increase its passengers to 20 million by 2020 and 37 million by 2030.
This also set stage for the construction of a multi-storey car park with a capacity to accommodate 1,500 cars at JKIA which increased KAA’s revenue collection.
Auctioning of planes
Over the last couple of years, KAA has issued several notices to airline owners in the country over the auctioning of their planes for failure to pay parking fees. The notices have targeted tycoons and government institutions that have abandoned their aircraft at various airports in the country.
KAA in 2021 noted that the abandoned planes were a safety risk in the airports and should the owners fail to pay their parking fees then they will be subjected to a public auction. A report by the Business Daily, indicated that the planes included those owned by local tycoons, politicians and others belonging to private companies running commercial aircraft.
Others are owned by state institutions such as the Kenya Police, Moi University and Somalia Airforce, among others.
“The said aircraft will be sold by public auction and the proceeds of sale shall be defrayed against any incurred charges and the balance if any shall remain at the owners’ credit but should there be a shortfall, the owner shall be liable thereof,” said then KAA acting managing director Alex Gitari.
During the Covid-19 pandemic, airline operators in the country decried decreasing revenue, prompting KAA to review the airport charges. This was a move to cushion the companies from the economic adversities of the pandemic.
The move by KAA received backing by the Ministry of Transport and the national government.