Provide incentives to all carriers.

Author:Kamani, Bobby

Package holidays involving chartered flights, once an important plank of international tourism, are on the decline. However, suggests Bobby Kamani, a fresh incentives approach could work wonders for Kenya's tourism.

In 2016, the Kenyan government unveiled a Kshl.2bn ($12m) Charter Incentive Programme (CIP), which aimed at subsidising the cost of tourists arriving in the country on chartered flights.

The main purpose of the CIP was to stimulate demand for destinations in Kenya by introducing new charters, while encouraging existing charter airlines to increase their route frequencies. It further served as a reward for charter airlines that made long-term growth commitments to bring in tourists to experience Kenya's beach product.

Under the CIP, all charter airlines bringing in tourists terminating at Moi International Airport, Mombasa, and Malindi Airport, were to be charged no landing fees for a period of two and a half years, as well as receive a passenger subsidy of $30 per seat for carrying international passengers terminating or disembarking in Kenya over the same time period. In order to benefit from the CIP, charter airlines were required to ensure that a minimum of 80% of the passengers brought in must be terminating in Kenya and they had to commit to operating the Kenya route for at least two years.

The focus was placed on holiday destinations and seats were usually booked through tour operators as part of a package. In 2014, the coastal region suffered a major blow, with the withdrawal of UK charter flights following a travel advisory imposed by the British government. Several other continental European charters followed suit.

A charter airline that operated once a week would bring in an average 300 passengers, thereby contributing approximately Ksh1.65bn ($16.5m) in tourist spend. From the launch of the CIP in January 1016, until its untimely demise at the end of 2.017, a dismal number of only five charter airlines qualified for the advertised incentives.

Reinvent incentive system

Trends thus reveal that the tourist charter flight model is rapidly on the decline. In 1007, the segment's share of all flights was 6%. Ten years later, this share had dropped to about 3%. The scheduled airlines and low-cost airlines segments have absorbed a substantial part of the charter market in recent years as more people are planning their holidays through online booking channels rather than relying on conventional travel agencies. In response...

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