Wednesday, 23 May 2018

KENYA: Kenya Airways Cuts Baggage Allowance,Seeks Exemption From Competition Regulations

Kenya Airways is seeking exemption from competition rules in its joint venture deal with Tanzania’s national carrier Precision Air.

KQ, which has a 41.23 stake in Precision Air wants regulatory approval to discuss revenue sharing, price setting, route schedules, sales and marketing on the two airline’s joint venture routes in Kenya and Tanzania.

The two carriers already have a code-sharing agreement that allows airlines to sell seats on each other’s planes on the Nairobi-Dar es Salaam route.

They have now applied to be exempted from competition regulations until April 2022.

In the joint venture agreement, the parties intend to align and coordinate reciprocal code sharing on the joint venture routes, said Competition Authority of Kenya director-general Wang’ombe Kariuki in a notice.

The routes in discussion are Nairobi, Mombasa, and Kisumu, Dar-es-salaam, Kilimanjaro and Zanzibar.

The parties intend to align and coordinate network management activities with respect to the Joint Venture including terms of routes, schedules, capacity and designation, pricing of ticket fares on the joint venture routes says Mr Wang’ombe.

The two airlines are also seeking exemption of competition rules in the management of any and all revenues attributable to the performance of the joint venture by any party.

These including without limit, setting up joint venues management systems and joint venue analysis systems, and joint marketing and sales activities with respect to joint venture.

Although competition laws forbid collusion to set prices, the law also allows companies to apply for exemptions. The Competition Authority gave the public 30 days to submit opinions on the proposal.

Meanwhile, Kenya Airways reduced baggage allowance on its intra-Africa routes to one bag, making it more expensive to fly with additional baggage.

The airline previously allowed users flying in Economy Class from one African country to another two bags of a maximum weight of 23 kilogrammes.

Flyers will now be allowed to have only one bag, with charges applicable for extra bags.

Baggage charges are a popular revenue makers for airlines.

Kenya Airways will implement a new baggage policy that will entitle its guests to 20 per cent discount on any extra bag purchases up to 24 hours to departure.

In addition to reduced extra baggage, fees within intra-Africa flights, guests will be entitled to one free bag in the Economy Class cabin at a maximum weight of 23 kilogrammes per passenger, Kenya Airways says.

The carrier however said the intra-Africa one bag allowance will not apply to passengers travelling to and from other continents, while Business Class passengers will maintain their allowance of two free bags at 32 kilogrammes maximum weight per bag.

Charges added onto the actual cost of a ticket have become a way for carriers to make additional income while keeping the cost of tickets low.

The carriers charge Economy Class passengers fees for baggage, legroom and seat selection.

The new baggage policy is part of Kenya Airways’ strategy to provide simplified and discounted competitive prices for passengers who book their extra baggage, any time before 24 hours to departure while enhancing customer service for our guests, says Kenya Airways Group Managing Director and CEO Sebastian Mikosz.

Tourism Observer

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