KQ big gainer from Sh700m waiver for airlines, concessionaires
A photo taken on November 5, 2022 shows Kenya Airways planes at the JKIA parking bay. KQ is among the biggest beneficiaries of a Sh700m waiver support for airlines and concessionaires by KAA.
National carrier Kenya Airways is among the biggest beneficiaries after the Kenya Airports Authority (KAA) granted Sh700m waiver support for airlines and concessionaires in the 2020/2021 financial year to help them recover from the effects of the economic disruptions linked to the Covid-19 pandemic.
The waivers came in form of airport parking fees and concession payments to prop recovery of the industry hit by low passenger numbers and traffic.
“Despite the challenging business environment, the authority extended support estimated at Sh700million to airlines and concessionaires in terms of waivers on aircraft parking and concession payments to catalyse business recovery” KAA board chairman Isaac Awuondo said in a disclosure.
KQ majorly operates from KAA-managed facilities in the country including the Jomo Kenyatta International Airport(JKIA), Moi International Airport, Kisumu International Airport, and Eldoret International Airport—placing it as a key beneficiary of the waivers on airport parking fees.
KAA charges about $10(Sh1,230) every day as parking fee for smaller aircraft but rises to over $100 (Sh 12,300.26) for larger planes. Airlines in Kenya have to either start or terminate their journey in Nairobi and with the restrictions on movement during the Covid pandemic, it meant they could not conduct any business.
KAA granted the waivers following an application by the Kenya Association of Air Operators (KAAO), which is an umbrella body of commercial airlines. The association wrote to KAA requesting a waiver on parking fees as they have not been in business, making it difficult to generate revenue.
Data by KAA showed that aircraft movements and passenger volumes last year declined by 50.5 percent and 26.7 percent respectively relative to the period ended June 30, 2020, although cargo volumes grew 1.8 percent on imports of Covid-19 supplies.
The decline in business hit the State firm’s revenue which fell 37 percent to Sh8.4billion in the financial year ended June 2021, compared to Sh13.3 billion recorded in a similar period ended June 2020.
Besides the waiver on aircraft parking charges, KAA is 2020 also gave a waiver of minimum annual guarantees for all concessionaires for three months. Concession fees applicable to ground handling, duty-free, catering services, advertising, car parking, and others will be based on actual activity.
Additionally, KAA also deferred 75 percent of the rent for businesses that operate from airports like duty-free shops for the period April-June 2020 to be paid in nine monthly equal installments effective July. Duty-free shops at JKIA had requested a waiver given that they rely on passengers as their main clientele.
