Aviation news update – Can Kenya’s aviation boom be sustained in the face of higher inflation and rocketing jet fuel prices

IT IS SURVIVAL FOR THE FITTEST IN AVIATION

The aviation industry, just recovering from the sharp recession during and after the global financial and economic crisis, is facing another serious threat to the industry’s ability to make up for the record losses IATA airlines suffered in past years. Rising fuel cost are causing crisis meetings amongst managements and only those fortunate enough to have favourable fuel hedging contracts with their suppliers are presently exempted from these worries, that is until those contracts come up for renewal again.

Most airlines however, especially those in Eastern Africa presently engaged in a do or die fare war on Kenya’s domestic routes, are contemplating fuel supplements, or where already in place those to rise even higher, a financially sound decision finance directors have been advocating for, but also a potential factor to drive customers back to overland busses, at least those marginal market segments the current low fares have attracted on the routes to Mombasa and Kisumu from Nairobi.

There is growing speculation in Nairobi’s aviation circles over an upcoming market consolidation, and while tourism to Kenya in particular continues to boom, for now, rising air fares – already hit this year by ‘eco taxes’ in parts of Europe and other related regulatory cost increases – may well hit and depress demand for air travel too. Home heating bills in the key consumer markets in Europe are already leaving potential long haul travellers with a sizeable hole in their pockets, and industry observers presently at ITB in Berlin are behind the scenes speaking of storm clouds on the horizon of vacation businesses and air travel, inspite of the entire industry hyping confidence, in public that is, to keep up appearances.

Should in fact the East African aviation market have to consolidate, it could span from the scheduled airlines operating jet services from JKIA to safari air operations at Wilson Airport. Inflationary data just obtained also show that the falling value of the regional currencies is pushing price rises up faster and further than expected, and such developments for sure also affect business travel plans as companies, afraid of another bust cycle, are tightening their belts again to save cost as and where they can before it may be too late.

Hence, it seems that the recent demand boom for airlines in Eastern Africa may well be an endangered species, at least while inflation is running way ahead of forecasts and aviation fuel prices too have now reached a level beyond the pain threshold.

Watch this space.

Breaking News – Uganda’s tourism ministry taken to court over plans to demolish the Uganda Museum

MUSEUM SAGA NOW IN COURT

In a predictable development have civil society organisations and heritage advocates gone to the High Court in Kampala to stop the plans by the Ministry of Tourism to demolish the Uganda Museum and instead put up a 60 – yes SIXTY – storey building instead. At least four organisations, probably to be joined later by other groups and individuals should the case go to trial, are seeking an injunction to stop the ministry from going ahead with any preparatory work leave alone starting to demolish existing structures, in a bid to save the historic post independence building and preserve ‘history and heritage for future generations’ as one of the involved parties put it to this correspondent.

This will again pit the tourism minister against opponents of his decrees against civil society, similar to a case he lost when the High Court annulled his appointments of a board for the Uganda Wildlife Authority on the grounds that they lacked qualifications required under the Wildlife Act.

The case will be heard on 21^st of March and government, already claiming the new building will improve and promote Uganda’s infrastructure will be represented by the Attorney General while the plaintiffs have reportedly lined up some of Kampala’s finest legal minds to stop the ministry in its tracks. Meanwhile the ministry has tried to appease the public by saying that two floors of the building would be dedicated to house the exhibits presently found in the museum. Critics however pointed out promptly that the historic ‘Lugard Fort’ too was to be protected by government and even had a court order on it, but was still demolished to make way for an expansion of the national mosque in Old Kampala, and when eventually reconstructed at a different site lacked several key attributes, making it less valuable and no longer authentic, saying the same might happen to priceless artefacts and exhibits in the present museum.

One regular source within the minister told this correspondent last evening that the minister would likely have to say something about the upcoming case and as and when his comments are on record an update will be issued. It was also said, off the record, that the recent demand by members of the East African Legislative Assembly, and several of their lawmaking colleagues in the Ugandan Parliament to spare the Uganda Museum had rattled the hierarchy in the ministry as it drew additional local, regional and even international attention to their plans.

Watch this space.