The Kenya Association of Air Operators (KAAO) has urged the government to review the increasing number of taxes in the aviation sector as they are negatively impacting the sector in Kenya
- KAAO Chief Executive Officer Liz Aluvanze said Kenya is the only country regionally and globally levying several taxes on aircraft, spare parts and aviation fuel.
- This has led to a worrying decline in the development and growth of the sector resulting in job losses and migration of maintenance activities to neighbouring states.
The Kenya Association of Air Operators (KAAO) has urged the government to review the increasing number of taxes in the aviation sector as they are negatively impacting the sector in Kenya.
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KAAO Chief Executive Officer Liz Aluvanze said Kenya is the only country regionally and globally levying several taxes on aircraft, spare parts and aviation fuel making the industry uncompetitive and unsustainable amid a surge in global and regional competition.
“This has led to a worrying decline in the development and growth of the sector resulting in job losses, migration of maintenance activities to neighbouring states, decline of Kenya as a regional hub and overall decrease in revenue for the operators and government,” she said.
KAAO Executive Committee hosted the Cabinet Secretary State Department of Transport and Roads Kipchumba Murkomen and Permanent Secretary Mohammed Daghar to deliberate on improving partnership between Government and the private sector.
The meeting agreed on the need for industry input in major policy decisions affecting the sector to ensure there is a win-win outcome that supports growth and eliminates challenges bedevilling the industry.
This includes involvement of the association in development of the National Aviation Policy which will set the tone for Kenya as an integrated aviation hub to cater for all operators in the region including commercial, private, recreational air operators, approved training organizations (ATOs), approved maintenance organizations (AMOs), hot air balloon operators, and remotely piloted aircraft systems (RPAS) operators.
“The aviation industry has immense potential which, if exhaustively harnessed, will make Kenya an aviation hub and a force in the global market. We particularly recognize the important role the aviation sector plays in the tourism and horticulture sectors hence the need for an all stakeholder led approach in policy making and infrastructure development prioritization,” CS Murkomen said in response to issues raised by KAAO.
KAAO also proposed that the government should prioritise the development of strategic airports and aerodromes based on demand and revenue generation channels to make them sustainable. The industry lobby group also called for improvement of infrastructure in airports around the country including expansion of runways to ease congestion, new terminal buildings, reconstruction of pavements and aeronautical ground lighting and development of parking silos and business parks. KAAO says this will help secure existing business and enable them to grow further,
“We are glad that we have open communication channels between KAAO and the Government. We purpose to cultivate a symbiotic relationship in order to achieve a safe, efficient, sustainable and economically viable aviation industry,” She added.
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Kenya has 440 airports and airfields 18 of which are actively managed by Kenya Airports Authority (KAA). In May 2022 Kenya scored 91.77% after a mandatory ICAO universal security audit, the highest result ever recorded for the region surpassing the target set by ICAO to attain above 90 percent by 2030.
According to IATA Air Connectivity Index Kenya has increased the number of routes and destinations by approx. 70 percent between 2009 and 2019 compared to South Africa and Ethiopia that grew by 44 percent and 349 percent respectively.
Kenya’s aviation sector contributes US$1.5bn to the GDP comprising US$740m directly, US$515m through indirect activities down the supply chain and US$294m from employees’ and stakeholders spending. The sector employs 26,000 jobs directly, a further 104,000 indirectly and 59,000 more induced.
The aviation sector’s impact on the tourism industry accounts for an extra US$1.6bn contribution to GDP & 336,000 jobs. The Jomo Kenyatta International Airport (JKIA) is the world’s third largest export hub of cut flowers employing 150,000 Kenyans and contributes to approximately 1 percent of GDP.
