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Kenya has tightened controls on local airline operators eyeing short-term leases of aircraft, in proposed changes that if approved by Parliament, could pile misery on local fresh produce exporters already disrupted by a decision by several international airlines to withdraw freight services at the Jomo Kenyatta International Airport (JKIA), citing lower returns.
In new proposals introduced by the Kenya Civil Aviation Authority (KCAA), the State has limited the number of foreign aircraft that a local operator can acquire on a short-term basis to not more than 50 percent of their existing fleet, or five aircraft whichever is less.
“Authority may upon request approve the operation of an aircraft under wet lease or damp lease arrangement to meet temporary and exceptional requirements of an ongoing air service operation for a period not exceeding 12 months provided that the number of wet-leased or damp leased aircraft shall not exceed 50 percent of the Kenyan registered aircraft on the Air Operator Certificate or five aircraft whichever is less,” KCCAA said its proposed rules.
This means, for instance, a local operator with a fleet of two aircraft can only lease a single plane, effectively limiting daily frequencies for cargo carriers and setting the stage for reduced capacities.
Under current Licensing of Air Services (LAS) regulations 2018 there are no limitations on the number of cargo aircraft that local airline operators can lease—a position that could change if legislators endorse proposals under the Licensing of Air Services (LAS) Regulations (2024) which are currently under consideration by the office of the Attorney General prior to tabling in Parliament.
A wet lease is an arrangement whereby one airline (the lessor) provides an aircraft, complete crew, maintenance, and insurance to another airline or other type of business acting as a broker of air travel (the lessee), which pays by hours operated.
Under it, compensation paid for the lease is the payment for an air transportation service only, similar to riding in a cab. This is contrary to a dry lease, which involves leasing an aircraft without crew.
Part 22 (4)(a) of the proposed regulations also prohibits local airlines from running fleets that are wholly wet leased from foreign carriers.
“The authority exercises a regulatory which is only guaranteed if aircraft are registered in the Kenya civil register. If an operator’s fleet consists entirely of wet-leased aircraft KCAA will not have any oversight responsibility of the fleet,” the proposed rule stated.
This is contrary to the current regulation that provides that “The authority may upon request by an air carrier approve the operation of an aircraft under a wet lease arrangement to meet temporary and exceptional requirements of an on-going air service operation for a period of six months provided that there exists evidence of adequate insurance cover for the operation under wet-lease arrangement.”
Industry players said the proposed changes could affect key sectors such as horticulture that are mainly reliant on export markets such as Europe.
Insiders argued that an operator requires a minimum five to seven aircraft of the Boeing 747 type every day of the week to effectively service demand in perishable cargo exports.
“The goal of any airline uplifting cargo out of Kenya is to minimise the cost to the customer as much as possible so that these vegetables can sell whilst providing a seamless daily service to the market,” a local operator who declined to be named said.
Exporters at the JKIA are facing a crunch after key international cargo airlines such as Qatar, Turkish, and Magma Aviation temporarily withdrew their freighters citing lower returns on the route.
For instance, from Asia to the US where these cargo airlines are getting up to $8 (Sh1,032.95) per kilogramme compared to Kenya where they are getting from $2.5 (Sh322.79) to $2.8 (Sh361.54) per kilogramme.
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