Kenya has shelved its ambitious plan to own a national shipping line due to high operating costs, leaving the private sector to continue benefiting from revenues accrued from the cargo chartering business.
Nairobi’s decision comes barely a year after Zanzibar folded its line and auctioned the vessels.
This week, Kenya’s Cabinet approved the dissolution of the Kenya National Shipping Line (KNSL) among 15 parastatals, meaning the services will be rendered by the private sector.
Cabinet said the 16 corporations earmarked for disbandment have outdated mandates or their services can be supplied by the private sector.
Plans to revive the KNSL have been encountering challenges, with concerns that the company cannot compete, amid opposition to its proposed operation of the second container terminal (CT2) at the Port of Mombasa.
In 2018, the government unveiled plans to revive KNSL, with hopes that it would have the ability to contribute $3 billion annually to the economy and create 6,000 jobs. But the plan ran cold over concerns that history would repeat itself by pegging the revival on slot chartering.
To give the company a leg-up, the government signed a memorandum with the Mediterranean Shipping Company (MSC) in 2018 aimed at building a partnership in which KNSL allocates slots for cargo, thus exposing it to the global shipping environment.
The government also amended the Merchant Shipping Act 2019 to facilitate KNSL and MSC to jointly run Port of Mombasa’s CT2. MSC controls a 20 percent shareholding in KNSL.
The latest move puts in doubt plans to revive East African national shipping lines over concerns that the companies do not have the capacity to operate.
Kenya and Zanzibar have recently proved it is difficult for national shipping lines to compete without own vessels and containers, with chartering slots making it difficult for them to break even.
In Kenya, the state continues to lose more than $3 billion annually to foreign ships which handle cargo at Mombasa and Lamu ports, as per the records by Kenya Maritime Authority.
Some industry observers say that with more cargo expected due to increasing demand of imported goods, a shipping line would help cut the costs paid to foreign shipping lines.
But shippers have lauded the government’s move, saying the private sector will improve efficiency and cut cost of operation.
“If services are left to private firm, it would lead to reduction of the number of government agencies shippers need to get permits from, address issues of overlapping roles and mandates, and reduce total costs for permits and levies. Service delivery should, however, not be compromised,” said Agayo Ogambi, CEO of Shippers Council for Eastern Africa (SCEA).
Incoming Kenya Ships Agent Association (KSAA) chairman Elijah Mbaru said cost of operation of ships in the East African region was high, considering Mombasa and Dar es Salaam ports do not have bunkering services.
“Ships plying the Indian Ocean mostly travel to Seychelles for bunkering services, hence increasing costs. Such services ought to have been introduced,” Mr Mbaru said.
Bunkering is refuelling of cargo vessels, an activity exercise performed daily at ports to help ships to call at different ports within the main maritime trade routes.
Last June, Kenya Ports Authority (KPA) announced plans to start such services but have not been fully effected to date.
KNSL was supposed to own Container Terminal 2 (CT2) at Mombasa Port, with an annual capacity by 550,000 twenty-feet equivalent unit (teus), and second phase of the terminal would bring an additional capacity of 450,000 teus, bringing the total capacity to a million teus.
KNSL was established in 1987 as the national carrier for seaborne trade, but years of mismanagement and accumulation of massive debts led to its collapse.
In Tanzania, increasing operating costs led to Zanzibar Shipping Corporation, the only one in the East African region, to auction three of its vessels. ZSC then in May last year floated a tender to dispose of three vessels, Mv Maendeleo, MT Ukombozi and MV Mapinduzi 1.
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Air Tanzania Banned From EU Airspace Due to Safety Concerns
Several airports have since locked Air Tanzania, dealing a severe blow to the Tanzanian national carrier that must now work overtime to regain its certification or go the wet lease way
The European Commission has announced the inclusion of Air Tanzania on the EU Air Safety List, effectively banning the airline from operating in European airspace.
The decision, made public on December 16, 2024, is based on safety concerns identified by the European Union Aviation Safety Agency (EASA), which also led to the denial of Air Tanzania’s application for a Third Country Operator (TCO) authorisation.
The Commission did not go into the specifics of the safety infringement but industry experts suggest it is possible that the airline could have flown its Airbus A220 well past its scheduled major checks, thus violating the airworthiness directives.
“The decision to include Air Tanzania in the EU Air Safety List underscores our unwavering commitment to ensuring the highest safety standards for passengers in Europe and worldwide,” said Apostolos Tzitzikostas, EU Commissioner for Sustainable Transport and Tourism.
“We strongly urge Air Tanzania to take swift and decisive action to address these safety issues. I have offered the Commission’s assistance to the Tanzanian authorities in enhancing Air Tanzania’s safety performance and achieving full compliance with international aviation standards.”
Air Tanzania has a mixed fleet of modern aircraft types including Boeing 787s, 737 Max jets, and Airbus A220s.
It has been flying the B787 Dreamliner to European destinations like Frankfurt in Germany and Athens in Greece and was looking to add London to its growing list with the A220.
But the ban not only scuppers the London dream but also has seen immediate ripple effect, with several airports – including regional like Kigali and continental – locking out Air Tanzania.
Tanzania operates KLM alongside the national carrier.
The European Commission said Air Tanzania may be permitted to exercise traffic rights by using wet-leased aircraft of an air carrier which is not subject to an operating ban, provided that the relevant safety standards are complied with.
A wet lease is where an airline pays to use an aircraft with a crew, fuel, and insurance all provided by the leasing company at a fee.
Two more to the list
The EU Air Safety List, maintained to ensure passenger safety, is updated periodically based on recommendations from the EU Air Safety Committee.
The latest revision, which followed a meeting of aviation safety experts in Brussels from November 19 to 21, 2024, now includes 129 airlines.
Of these, 100 are certified in 15 states where aviation oversight is deemed insufficient, and 29 are individual airlines with significant safety deficiencies.
Alongside Air Tanzania, other banned carriers include Air Zimbabwe (Zimbabwe), Avior Airlines (Venezuela), and Iran Aseman Airlines (Iran).
Commenting on the broader implications of the list, Tzitzikostas stated, “Our priority remains the safety of every traveler who relies on air transport. We urge all affected airlines to take these bans seriously and work collaboratively with international bodies to resolve the identified issues.”
In a positive development, Pakistan International Airlines (PIA) has been cleared to resume operations in the EU following a four-year suspension. The ban, which began in 2020, was lifted after substantial improvements in safety performance and oversight by PIA and the Pakistan Civil Aviation Authority (PCAA).
“Since the TCO Authorisation was suspended, PIA and PCAA have made remarkable progress in enhancing safety standards,” noted Tzitzikostas. “This demonstrates that safety issues can be resolved through determination and cooperation.”
Another Pakistani airline, Airblue Limited, has also received EASA’s TCO authorisation.
Decisions to include or exclude airlines from the EU Air Safety List are based on rigorous evaluations of international safety standards, particularly those established by the International Civil Aviation Organization (ICAO).
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The process involves thorough review and consultation among EU Member State aviation safety experts, with oversight from the European Commission and support from EASA.
“Where an airline currently on the list believes it complies with the required safety standards, it can request a reassessment,” explained Tzitzikostas. “Our goal is not to penalize but to ensure safety compliance globally.”
Airlines listed on the EU Air Safety List face significant challenges to their international operations, as the bans highlight shortcomings in safety oversight by their home regulatory authorities.
For Air Tanzania, this inclusion signals an urgent need for reform within Tanzania’s aviation sector to address these deficiencies and align with global standards.
The path forward will require immediate and sustained efforts to rectify safety concerns and regain access to one of the world’s most critical aviation markets.
Source: allafrica.com
