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Analysis: High cost of doing business hurting African airlines


Heavy taxation has left African airlines operating in a high-cost environment,  making foreign carriers to dominate the continental skies.

The details emerged even as Kenya Airways CEO Sebastian Mikosz announced his exit from the troubled airline after failing to turn around KQ fortunes.

Mikosz, who previously served as Polish Airlines CEO, has more than 20 years experience in executive management in both the public and private sector.

That the high cost of doing business is hurting the aviation sector emerged during the African Airlines Association (AFRAA)'s 8th Aviation Stakeholders Convention held in Mauritius early this month.

AFRAA secretary general Abderahmane Berthé called for enhanced collaboration among the African airlines to accelerate development.

“A successful and viable African aviation industry is achievable, but this requires rigorous efforts and close coordination and collaboration by all stakeholders, including governments, regulatory authorities, airports, air navigation service providers, suppliers of the wide range of aviation products and services and the customers. Together, we can ensure an integrated, interconnected Africa that is competitive within itself and globally,” Berthé said during the opening ceremony.

Lasting relationships

He said there was a need to establish lasting relationships and partnerships between industry players and the airlines.

Participants were urged to ramp up efforts to reduce the cost of doing business in the aviation sector.

The forum asked governments to reduce taxes, charges and fees imposed on airlines and other key services and to ensure that airlines are able to repatriate their earnings.

These challenges were cited for Kenya Airways persistent run into losses which almost crippled KQ’s operations.

The loss-making carrier got government bailout three years ago.  Sub-Saharan Africa’s third-biggest carrier by passenger traffic has a plan to be profitable in 2022, though it remains dependent on gaining government approval to become the operator of Nairobi airport.

The potential that lies in Africa’s air transport is under-explored largely due to the low levels of connectivity in its intra-regional market, the forum heard.

Collaborative approaches amongst African aviation players were cited as critical ingredients in advancing the industry in a dynamic yet challenging environment.

Edited by P .Obuya

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