Dar, Nairobi snub air ticket surcharge.

Kenya and Tanzania have snubbed the proposed air tickets surcharge as an alternative funding mechanism for Civil Aviation Safety and Security Oversight Agency (CASSOA).

Established in June 2007, CASSOA is an institution of the EAC responsible for assisting Partner States in regulatory functions related to safety and security to meet international obligation as provided for in the Chicago Convention.

Faced with a budget deficit, the CASSOA last year requested the EAC to enforce a $0.70 surcharge on air ticket for each embarking passenger to substitute an erratic equal partner states contribution-funding model.

A surcharge is a charge that is added on in addition to the regular charge.

However, Kenya and Tanzania have tirelessly ridiculed the idea, prompting the EAC Council of ministers who met in Burundi recently to reject the proposal.

“Council of ministers resolved, due to the CASSOA budget constraints and lack of agreement on the $ 0.70, to review the CASSOA Strategic Plan in order to remove among others, duplicated activities with the Partner States Civil Aviation Authorities,” reads the EAC report.

Now, the Partner States are supposed to submit to the EAC Secretariat the issues of duplication for the secretariat to consolidate the issues and share them with the Partner States and CASSOA.

Immediately after the task is done, the EAC partner states will commence the process of reviewing the CASSOA Strategic Plan, with priority to focus on proposals to assist Partner States look for alternative sustainable funding mechanisms for CASSOA.

The EAC officials say Kenya has been buying time by requiring more time to consult and on several occasions requested the proposal to be suspended until its technocrats reach a consensus.

Tanzania, however, has been clear that the EAC partner state’s equal contribution mechanism should be upheld.
Rwanda, Uganda and Burundi were in favour of the CASSOA proposal, the report reads in part.

Since the EAC cannot sanction any bid without consensus among its partner states, the CASSOA deal had to be rejected, for lacking the consent of Kenya and Tanzania.

CASSOA blueprint

Should CASSOA blue print sail through, all EAC bound foreign and domestic tourists would have be required to pay a $0.70 air ticket surcharge on average to cover operations costs of the agency.

This model would enable CASSOA to generate $14.102 million in four years from 2011/12 up to 2012/15. The agency would collect nearly $3.196 million and $3.406 million in the first and second year
respectively.

Again, CASSOA would raise $3.630 million and $3.869 million in third and fourth year respectively, the proposal indicates.

The mechanism would also oblige the five EAC partner states to contribute to CASSOA, based on the level of aviation activities -measured by the number of embarking passengers in each state.

The pay as you earn mechanism would see the giant Kenya and Tanzania combined pay $12.134 million out of the projected $14. 102 million in four years, as their aviation undertakings are fairly booming compared
to Burundi, Rwanda and Uganda.

Kenya which is leading by far in aviation vibrancy in the EAC would pay $6.938 million in total in four year period as it is projected to receive 9,911,760 air passengers, followed by Tanzania’s $5.195 million from 7,422,679 passengers.

Onesmo Metili, a Tanzanian Business strategist, says that he was expecting Tanzania to snub the proposal because it is already considered as the most expensive destination in the region.

“Imposing air tickets surcharge means to push Tanzania on the verge of competitiveness in the EAC travel industry, so Tanzania had no other alternative than to reject the proposal,” Metili who runs tour firm told this reporter.

But he added that Kenya, with far higher competitive edge than any country in the region, a $0.70 surcharge on air tickets would not beof much detriment to its position in the market