Investors decry high cost of flying in region, blame high govt taxes

Friday October 18 2013

John Mirenge, chief executive officer of RwandAir, said airlines business is a game of numbers yet there are few frequent fliers. Photo/FILE

Flying within the East African Community countries is priced beyond the reach of many citizens.

An investment meeting in Kigali noted that air transport is considered a luxury among the majority of East Africans due to high cost of air tickets.

The investors castigated governments in the region for levying high charges on industry players who pass on the costs to passengers.

According to the investors, average East Africans use road and water transport systems, which they consider affordable to them.

Airline operators exonerated themselves from blame, saying government levy taxes, which makes it difficult to reduce the cost of air tickets.

Some of the costs the airlines incur include air navigation fees, handling charges, fuel costs, taxes and lighting fee if an airline is to land at night.


John Mirenge, chief executive officer of RwandAir, said airlines business is a game of numbers yet there are few frequent fliers.

Mr Mirenge said in some instances, airlines pass on over 50 per cent of the costs to the passengers in order to cover operational expenses.

“In aviation, volumes make a difference. Three flights daily to Entebbe and back to Kigali we do not carry more than 200 passengers,” said Mr Mirenge at the Uganda-Rwanda business forum in Kigali.

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The meeting was to promote trade, investments and bilateral partnerships between the two states.

Olive Kigongo, head of the Uganda Chamber of Commerce noted that the air travel cost between Uganda and Rwanda is exorbitant.

Uganda’s Trade and Co-operative Minister Amelia Kyambadde and Rwanda’s Infrastructure Minister, Prof Silas Rwakabamba, who attended the forum were non-committal on possibility of reducing taxes.

The forum noted that if taxes are reduced, airfares could go down to as low as $150 from $300 for a 45- minute flight between Entebbe and Kigali.

“We are saying to aviation authorities that infrastructure was built years ago and their payments have been completed. Why can’t governments forego some of the charges to bring down the ticket costs?” asked Mr Mirenge.

For instance, an airline operating a CRG aircraft at Kigali International Airport is charged $600 handling fees, $9 parking fees, $100 navigation charges, $51.9 lighting fees and $103.95 landing fees in addition to fuel cost.

A litre of jet fuel costs $1.62 per litre in Kigali. This means an operator of a CRG has to pay at least $2,500 every time the aircraft lands and takes off at Kigali International Airport.

The cost of jet fuel has been increasing this year before settling at 1.62 mid last week at the Kigali International Airport. According to operators, the high cost of fuel is as a result of hidden taxes and poor infrastructure suppliers are subjected to.

To bring down the cost of jet fuel, the meeting told the governments to reduce the taxes. Globally, fuel accounts for about 36 per cent of an airline’s operational cost while in Africa this ranges from 45 to 55 per cent