Topic:
Airline Industry Overview
Submitted to:
Dr. Nayyer Rafique
Submitted by
Talha Pracha
Reg Id:
225237
Kenya Airline Industry
Airline industry of the Kenya contributes USD 3.3 billion in the economy which is equal to the 3.1% of
the total GDP. It supports 460,000 jobs total in which 21,000 are directly employed to this sector. The
national carrier of Kenya is Kenya airways which contribute USD 1 billion to the GDP. It is heavily state
owned airline which is 48.9%.
Aiports and air navigation services contribute USD 136.2 million and total 15,400 jobs. Tourism from
aviation generates USD 1.2 BILLION and total 242,200 jobs, while from international tourists the
contribution is USD 1.9 billion through the air travel.
Kenya air has direct links to 66 international airports across the 44 countries with 82 daily outbound
flights.
https://www.iata.org/en/iata-repository/publications/economic-reports/the-value-of-air-transport-to-
kenya/#:~:text=In%20Kenya%2C%2021%2C100%20people%20are,to%20GDP%20and
%20459%2C500%20jobs.
Regulatory framework:
Kenya airline industry is highly regulated industry. This airline industry is governed by the laws,
regulation, international conventions and government agencies.
Civil Aviation Act Number 21 of 2013:
This laws empowers the Kenya civil aviation authority. KCAA regulates the licensing, safety, inspections,
airworthiness, airport management and aviation security, Airlines must need KCAA approval to operate.
KCAA conducts all the aviation activities within their countries like the audits, inspections,
investigations and airworthiness certificate
KCAA also regulates the catering services, cargo, mail and ground handlers.
Regulatory challenges:
There are highly regulation policies in Kenya but the issues arose are the poor recruitment policies,
aging personnel and inadequate staff development has negatively impact the growth and safety of the
Kenya civil aviation authority.
There is also growth in the passenger traffic, but the domestic airlines in the Kenya faces financial
losses due to the high competition and the dominance of few large players in the market.
Between 2011 and 2015, airlines firms operating sub-Sahara Africa recorded the highest aircraft
accident rate in the world. Most of these accidents were caused by the flight crew errors, external
threats and poor condition of the aircraft in use. In this 52% accidents were occurred due to a lack of
efficient regulations.
Solutions through liberalization or deregulaton:
liberalization would bring more private companies, pushing airlines to improve recruitment and
training. It could also lead to better international partnerships for training.
Smaller airlines struggle with competition from big players. Deregulation or liberalization would let new
airlines enter, increasing competition and lowering prices. It would also force larger airlines to improve
services and cut costs
Deregulation or liberalization can relax some rules but still keep strong safety measures. Airlines would
focus on safety to stay competitive and meet global standards, improving safety and competition
Deregulation or liberalization would allow airlines to improve operations and attract foreign
investment. More competition would lead to better services and industry growth, benefiting everyone
Pakistan Open Skies Policy Pros and Cons
Pros of Pakistan’s Open Skies Policy:
It Increased Connectivity as more international flight options are available for passengers.
Airline Expansion as foreign airlines starting giving services in Pakistan's market.
Economic Growth is increased which Facilitates trade, tourism, and investment.
Approximately Rupees 107 billion was lost by national exchequer during 2017
Cons of Pakistan’s Open Skies Policy:
Loss of National Airline Traffic as the foreign airlines capture traffic of PIA
Foreign carriers operate in multiple Pakistani cities
PIA faces loses due to competition from foreign airlines.
PIA faces difficulties in maintaining profitability due to foreign competition.
