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KCAA & TCAA Controversy: While Our Nations Clear the Air, Unseen Costs of Denied Traffic Rights Emerge

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This afternoon, a friend, Wuod Baba, asked me about Tanzania cancelling traffic rights into Kenya. I thought he was joking, for countries do not casually cancel traffic rights unless they are at war! In sum & substance, cancelling traffic rights is an extreme action reflecting a hostile relationship between countries and restricting movement between states. The final straw is a sad, cruel state of affairs. Is this our relationship with Tanzania?

My first reaction was to pore into the internet to establish if it was true. Alas, truth it is. I will analyze the impact of this action in layman’s and avoid aviation jargon to keep it simple. Tanzania’s reason for withdrawing traffic rights to Kenya is it applied for 5th freedom rights to ferry cargo out of Nairobi but was denied.

You may want to ask what 5th freedom is. The fifth freedom right is the right of aircraft of country A, from a service originating in country A, allowed to embark passengers and cargo in country B and disembark them in country C. Countries usually are stingy with 5th freedom rights cause it grants it access to take cargo/ passengers onwards to another country other than that it originated. The stinginess usually comes from the protest of its national carrier or other air operators from that country.

Let me delve a little into how traffic rights are dished in Kenya; I played a part in the process & know it from the back of my hand. Kenya Civil Aviation Authority (KCAA), in liaison with the Dept of Air Transport in the Ministry of Transport, receive applications for charters & traffic rights. They, however, cannot issue traffic rights without involving the national carrier Kenya Airways & other officially designated Kenyan pages.

READ RELATED ANALYSIS: TCAA, ATCL Should Reflect What The Nation Aims; We Move Forward in Development, Not Conflict.

Every season, KCAA receives applications from entrants; they list all the applications & call the national carrier & stakeholders for a forum to gather their views. If the national carrier & other local carriers object to the new entrants, it is most likely that the prospective page, Air Tanzania (TC), was denied traffic rights. KCAA doesn’t’ make such decisions without considering their interests.

Their commercial interests might often conflict with our national interests. Hence, KCAA should play a neutral role as the regulator to seek benefits for Kenyans. In this case, our farmers & traders, & also the development of JKIA as a regional hub. A bus station cannot become a thriving hub if bus operators are denied access.

Wait a minute; it’s’ rare for countries to deny cargo applications for freight-exclusive flights. This is because air cargo involves trade. Denying an air cargo license to operate, the government stifles business. Passenger applications are often rejected, but cargo licensing is usually more liberalized worldwide.

The stark truth is that it was odd for the Tanzanian application to be rejected. That’s’ the cause of the whole wrath. Someone in KCAA goofed & needs to get roasted, and the Tanzanians are breathing fire. The leading question is why were they denied. The public will soon prompt the regulator for an explanation.

Let me delve into what’s happening in Air Tanzania (TC); I worked professionally with top management staff in the ’90s. Tanzania recently acquired a dedicated B767 Freighter from Boeing 6 months ago. This puts the Tanzanians in the big league regarding cargo, as it can uplift 52 tons inter-continental to Europe.

Most people are unaware that JKIA is more world-renowned for cargo than passenger traffic. It’s’ among the world’s top fresh produce & flower airport destinations. Every week, at least 5000 tons of perishable horticultural produce is airlifted from JKIA to Europe. This requires an uplift of at least 700 tons a day.

To do this, at least 7 to 10 freighters swarm into JKIA to uplift fresh produce & flowers; the peak season is Valentine’s Day, Feb 14 and Mother’s Day, May 12.

The truth is that there has always been a shortage of air freight capacity out of JKIA, and that’s why air freight is expensive. It makes sense for the government to license as many cargo carriers as possible (including the Tanzanians), making freight cheaper for our farmers to export to European markets.

Air freight is tricky cause it’s’ uni- uni-directional, affecting the flight operational costs; hence, on one leg, you fly empty & which deters some cargo carriers from the market.

I am unsure of the 5th freedom route the Tanzanians were denied. I guess Europe could be amongst them, and if it’s’ African routes, why are we stifling our African trade? Kenya Airways, unlike Ethiopia, has never seriously dabbled in the air freight industry despite being in a country that is one of the world’s largest flower and horticulture producers.

KQ recently made its entree & acquired 2 B737F, which uplifts 18 to 23 tons at best. The aircraft can’t’ carry cargo on intercontinental flights & best suited for regional loads in the central & east Africa region. KQ’s freighters offer little or no competition to AirTanzania, which will play in a bigger league with its B767F.

In many forums, I have expressed an opinion that KQ should have acquired a larger aircraft, e.g. B767F, as part of its cargo strategy to feed it B737F (that plies its regional routes) with intercontinental cargo. Currently, as the KQ network stands, KQ has capacity imbalances in its regional & continental routes & needs to address this weakness, leading to capacity constraints. Perhaps a story for another day.

Tanzanians’ reaction was heavy-handed; they hit Kenyans where it hurt and cancelled 3rd & the 4th freedom rights of Kenya Airways. Which technically means Kenya Airways will soon have no traffic rights to operate into or from Tanzania. The rider is that the traffic lights will be withdrawn on Jan 22. This is a brilliant chess checkmate move; they want to give Kenyans only a week to rethink.

For a long time, the Tanzanians have beef with Kenyans and thrown a knockout punch; they are unlike the Dutch, who chose not to deny us traffic rights to Amsterdam when we recently denied them rights to Mombasa. The Tanzanians have arrived in our market. They are knocking on the door to enter & won’t’ take no for an answer.

I predict we are caught in a net & Kenya will quickly backtrack and grant the Tanzanians the rights they sought. Tanzania has been rising & we are bound to see a hard-knuckled Tanzania. We will move to shed light on our potential losses and go into its mathematics.

Kenyans are the market leader on the NBO-DAR route, & have more to lose. KQ operates under three umbrellas: KQ proper and its wholly owned subsidiary Jambo jet, plus a third little-known arrangement with Precision Air ( PW) under a code share arrangement, which does 3 to 4 flights a week, mainly concentrated towards weekend leisure traffic.

I was pivotal in founding the KQ / PW partnership with legendary then-CEO Alphonse Kioko & late brilliant Joel Chemwitich in 2005. KQ partnered with PW and was able to access traffic rights in its hinterland through the partnership. Tanzanian withdrawal of traffic rights had automatically affected the traffic rights to Jambo Jet cause KQ wholly owned it; take that to the bank.

It’s the same company. The codeshare between PW /KQ will also be affected cause the Tanzanians will revoke the KQ call sign to be reflected in the reservation distribution system due to the ban on KQ.

Now for the mathematics. I will give you my rough cut of it cause I have no access to KQ’s reservation system, but this is the general drift of the losses KQ will face. KQ, I believe & Jambo Jet each operate daily flights to DAR. In the worst scenario, it works to at least 28 flight legs (probably even more).

I assume that KQ has a revenue yield of Kes 25000 one way, with an average uplift of 60 passengers per flight. We are talking 60 x 25,000 x 28 x 4 weeks a month, which is 168 million.

I haven’t included passengers from international destinations rubbed through KQs Nairobi hub, e.g., USA & Europe going to Tanzania & this figure will hit over Kes 200 million monthly. Passengers whose flights were cancelled due to the denial of traffic rights will demand compensation.

KQ’s’ aircraft doing the route will sit idle, and wear and tear costs money. The Kenyan Civil Aviation Authority & Kenya Airport Authority will lose money in parking, passenger taxes, navigation fees, etc. Fuel companies will lose, not to mention NAS catering services, ground handling & taxi companies will stand to lose. On the Tanzanian side, they will also lose revenue from giving KQ the same services in DAR.

It is not sustainable for KQ. I am sure the Tanzanians are aware of that. Therefore, I gave the Kenyan government until Jan 22 to grant Air Tanzania 5th freedom rights on the grounds of reciprocity. TC still has traffic rights to Nairobi. The Kenyans haven’t’ withdrawn them. If things fail, the mode of public travel to Tanzania will be by bus, as Kenya slaps back based on reciprocity. Mambo ngumu!

Trust me, KCAA & /Kenya Airways will move quickly to the negotiating table to avoid the inevitable. KQ will be negotiating from a weaker position. KQ & Kenya needs to ask itself, what opportunities are the Tanzanians seeing that we don’t. Rather than deter the Tanzanians, we should seek ways to work with them on their new freight operation or launch the same. KQ Cargo doesn’t’ have long-haul cargo freighters. Can’t they think of working with TC? Who has one?

My word to the Tanzanians is that you recently bought new aircraft to restart TC & need destinations to fly them. Cancelling traffic rights is not the way to go. You need Kenya just as much as they need you. Kenya is one of your most significant trading partners. Seek special prorate agreements with KQ and work jointly to feed each other’s network; you’ll benefit from TC’s new metal, and it needs cargo that Kenya can provide.

The sad thing is that we, as members of the East African Community, must ask ourselves what the community is about. Does it have to come to this? We as a country need to re-examine our aviation policy. KCAA also seems to have some fundamental issues that need to be precise.

Mobile calls to Tanzania are costly, over Kes 30 a minute. Is this by intent? Kenyans & Tanzanians can’t afford to talk to each other without the strained relationships. The truth is the relationship between Kenya & Tanzania is, at best, frosty. This issue should have been resolved within the ambits of the EAC.

What we need in Africa is the liberation of air travel. Playing hardball stifles competition & makes air travel expensive for the consumer, and bottlenecks trade. The principles of the Yamoussoukro Declaration, which all African countries, including Tanzania & Kenya, subscribe to, have never been implemented. The declaration was signed by 44 African states of the AU in 1999 and became binding in 2002.

The day African countries allow for cabotage rights for all African carriers will change aviation in Africa. Cabotage means allowing pages from other countries to operate in each other’s domestic markets. That was the intention of the Yamoussoukro declaration: to open African skies. African countries still hoard traffic rights, which has hindered the aviation sector’s growth.

To operate in many African countries, you must give out ”incentives” known as royalties, which is the accounting way to pay legal bribes despite the Yamoussoukro declaration. This ups the costs of African travel. Congo is notorious, so airfares are notoriously steep in a country without roads. How sad!

Recently, Congo joined the EAC community, and I hope this issue will be raised. Kenya Airways had to pay royalties to operate in Lubumbashi route. Angola & many more have the same problems with tissue. Indeed, from my experience in aviation in Africa, I can write a book on the murky subject of traffic rights. Give credit: Kenya & SA in the past have been a little more liberal than most of Africa, which contributed to a vibrant sector.

If Africa allowed open skies, all our GDPs would increase. Africa can exponentially grow its economies. Money trading in Africa and Equity Bank operations in Congo is a money mint.

KQ was bigger than Emirates in the 80s when I started my aviation career; today, it’s’ a different story. It can be done. It’s’ all about policies. Change the policies, and aviation flourishes. Africa needs to trade with each other and visit each other. I can’t understand why Africans don’t see sense in this.

May our children implement what our fathers, & we have failed to do. May my dream of genuinely open African skies come true. My journal, my thoughts, my walk…

Dan Okwiri is a graduate of Cranfield University in the UK, holding a Master of Science in Air Transport Management. He is also a Chartered Member of the Institute of Transport & Logistics in the UK, and he earned his Bachelor of Commerce from Rajasthan University in India. Dan has attended numerous naviation courses, obtained leadership diplomas from Boeing and IATA, and is proficient in both playing the violin and pursuing artistic endeavors. With a distinguished career at Kenya Airways, he has since retired and is currently engaged in the hospitality industry and aviation consultancy. For communication, he can be reached at okwiri@gmail.com or through Tel +254722202108

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Rutashubanyuma Nestory
Rutashubanyuma Nestory
4 months ago

April 27, 2020: With the Dutch embassy extending support to the Kenyan horticulture industry, Kenya Airways Cargo boosted up its operation of transporting 40 tonnes of flowers and vegetables to Amsterdam. Additionally, Kenya Airways will fly to New York, Geneva, Dubai, Paris, and Guangzhou in the coming weeks. As part of the initiative to support Kenya’s renowned horticultural industry, the airline supported by the Fresh Produce Exporters Association of Kenya (FPEAK), Kenya Flower Council, Embassy of the Kingdom of the Netherlands in Kenya, the European Union in Kenya, and the government of Kenya – more flights are being planned in the coming weeks to gear up for the Mother’s Day celebration on May 10. Flying its first B787 Dreamliner as cargo-only flight to Johannesburg (medical supplies and essential goods) and followed by another flight to London (40 tonnes of fresh produce) this month, Kenya Airways in association with the government of Kenya has carried critical medical supplies from China. Recently, Air France KLM Martinair Cargo will operate two weekly cargo flights bringing 45-50 tonnes of cargo from Nairobi to Amsterdam. KLM’s B777-300 passenger aircraft will be used with ample belly capacity. This comes in addition to the existing full freighter flights Air France KLM Martinair operates regularly. The exports will be dominated by cut flowers and other perishable products, inclusive of vegetables and fruits from Kenya to the Netherlands. Netherlands for the last five years in a row has been ranked as the largest European market for Kenyan exports. It is also the largest export market for Kenyan products in Europe and the leading destination for Kenya’s cut flowers, vegetables, and fruits.

https://www.logupdateafrica.com/kenya-airways-flies-40-tonnes-of-horticulture-produce-to-amsterdam-aviation

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