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NEWS & CURRENT AFFAIRS

The Nairobian

Cost of flying to go up as State raises airport tax

Business

By - | Jul 26, 2012

By John Oyuke

Air passengers will now pay more to access Kenya Airports Authority (KAA) facilities.

Finance Minister Njeru Githae has given the Authority approval to increase the service charge for international passengers (otherwise known as departure tax) from $20 (Sh1680) to $40 (Sh3,360), a 100 per cent increase.

According to the assent given by the minister vide Legal Notice No 25 of April 2, 2012, domestic departures will also cost Sh500 instead of the current Sh300, an increase of 67 per cent effective July 1 this year.

Kenya Revenue Authority will collect the service charge on behalf of KAA, which is currently undertaking a major upgrading work at Jomo Kenyatta International Airport (JKIA), the country’s main airport that also serves as hub of the East African region.

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Kenya Association of Hotelkeepers and Caterers (KAHC) told its members that since the fees are included in the cost of the air ticket, carriers will be expected to increase ticket fares by a similar margin.

It is estimated that more than two million passengers pass through JKIA annually and the Authority targets to raise more than Sh6.7 billion.

The move to increase the charge – expected to be implemented soon by KRA – has elicited mixed reactions among tourism stakeholders, with some pointing out that it would make holiday packages more expensive.

“This is not just about people travelling on holiday. This will also affect tourists coming to Kenya who will pay this tax on departure,” one said. But others feel that raising fees and charges is the only way to finance and pay for expansion of JKIA.

Meanwhile, national carrier Kenya Airways (KQ) is counting on the ongoing expansion of the Jomo Kenyatta International Airport to position Nairobi as the African hub for travellers connecting to Asia and the Far East.

The airline unveiled plans to complete its route expansion programme to cover all African countries with 45 destinations already hooked up on its network.

New terminal

Recently, managing director, Titus Naikuni, said that the airline is developing a proposal to help build the new Terminal 4 unit at the JKIA. He said this following a directive by President Kibaki for KAA to allow more Public Private Partnerships (PPP’s) for the expansion of the airport.

“He (president) singled out KQ and said we need to look into PPP’s to build that terminal.

We are working on the proposal now, which we will present to the board and then to the Government. It is an uphill task, but we can handle the situation,” Naikuni said.

The new Terminal 4 — which passengers are expected to start using by mid next year — has a clear division between arriving, departing and transiting passengers.

The terminal consists of ground level for check in and bus terminal, level one for departures and level two for arrivals covering a floor area of 23,500 sq metres. The terminal, which is more than 60 per cent done, will also have seven contact gates.

According to Kenya Airports Authority General Manager for projects and Engineering services, Philemon Chamwada, security features at the new terminal address security concerns raised by the US government.