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Open skies agreement could lower airfares for flights between East African countries

The classification of flights between East African countries as domestic travel is set to help lower the price of air fare and boost the number of passengers, should an agreement between regional aviation regulators be settled.

The pending change will see the price of air tickets go down by up to 12% across the region, with domestic flyers charged a service fee of $5, compared to the $50 paid by international passengers.

The Kenya Civil Aviation Authority (KCAA) said that after discussions with their counterparts in the region, the recommendation was agreed to in principle. They are now lobbying for their respective governments to sign the agreement, said KCAA Director-General Captain Gilbert Kibe.

East African air travel has grown by 3.4% in the last 10 years, compared to the 5.5% international growth rate. The trend is believed to be a result of the high cost of air tickets for flights between East African nations.

It is estimated that 43% of air ticket prices in the region cover regulatory charges and taxes, with the former accounting for up to 24%, thus necessitating the need to reevaluate the pricing structure.

A recent study commissioned by the East African Business Council indicated air liberalization could eventually help reduce airfares by 9% and raise flight frequencies by 41%.

This, the report notes, could result in an additional 46,320 jobs and $202.1 million per annum in revenues in the five EAC states of Kenya, Uganda, Tanzania, Rwanda and Burundi.

Kenya Airways is suffering from financial troubles while Air Tanzania is about to be revived. RwandAir is the only carrier on an upward trend as Uganda Airlines collapsed long ago. Kenya Airways and its budget carrier JamboJet dominate the regional skies, flying to 12 routes out of the available 22.

 

http://ntv.co.ug/news/business/13/jun/2017/open-skies-agreement-could-lead-lower-airfares-between-east-african#sthash.5RSzz1wY.khOmiP9v.dpbs

 

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