Struggling Fly 540 Lands In More Trouble With Kenyan Authorities

The low-cost airline Fly540 that has fir time now been struggling to get its wings up in the air owing financial struggles has nosedived into problems with the Kenya Airport Authority(KAA) and Kenya Revenue Authority(KRA) over alleged defaulted payments running into millions to the two agencies.

According to sources, Fly540 owes KAA Sh18M as an accumulation of rent arrears while KRA demands from them Sh100M due to unremitted taxes.

It has emerged that the carrier has been playing cat and games with the taxman for a longtime.

NHIF Remittance

Another scandal that has been unchecked, some of the ex-employees talking to this writer alleged that despite being deducted from their salaries, they were shocked that their NHIF contributions were not remitted. These allegations are subject to investigations to ascertain as records exists and can easily be retrieved.

The airline’s CEO Don Smith has however dismissed the claims against him opining that his enemies are behind his ‘media attacks’ praying for his downfall.

In a statement that clearly targeted the jet carrier, Smith wondered why their competitor was not subjected to similar tribulations.

According to the besieged CEO, their rival Jambojet owes KAA close to Sh1B.

”We know KQ which also owes Sh17B has issues but why is Jambojet not allowed to pay KAA. It’s anti-competitive.”

It is of importance to note that the bitter rivals, Fly540 and Jambojet, are both low-cost airlines which started operations in 2006 and 2004 respectively.

Spotcheck at Fly540 offices at Watermark Business Park in Karen corroborated allegations of low staff morale among staff due to late salary payments and poor working conditions.

It has emerged that the current standoff with KAA that has led to Fly540 employees at the airports being denied security passes.

”Our officers at the airports now operate at the mercy of friendly security guards who sneak them in despite orders from KAA for our team not to be issued with security passes,” said an inside source.

An exper however, described the situation as high-level security breach given that Kenya is one of the countries targeted by terrorists and such mistakes with a potential large repercussions shouldn’t be entertained.

Smith further denied the allegations and stated that his employees’ security passes were up to date, adding that their salary is promptly paid every month.

An accountant at Fly540 only identified as Dion acknowledged the existing bad blood between the carrier and the two bodies, KAA and KRA over the controversial non-cleared balance.

He revealed the existence of multiple email communication in attempt to settle the matter amicably.

The current happenings are reminiscent of previous incidents that saw Fly540 embroiled in tough legal duel with the two bodies.

For instance in 2015 case in which the carrier lost a bid to challenge a Sh101M charge fir air navigation services and regulatory fees for November 2011 to August 2012.

Five Forty Aviation Limited which operates Fly540 has moved to court after Kenya Civil Aviation Authority(KCAA) slapped it with Sh101,455,818 agency notice in December 2012.

Passengers will no longer be able to book for Fly540 flights as The International Air Transport Association (IATA) has suspended low-cost carrier Fly540 from using its automated ticketing system claiming it breached its Billing and Settlement Plan (BSP) rules

— Moe (@moneyacademyKE) January 5, 2021

Subsequently, in 2020, a Nairobi court allowed KRA to recover Sh100M from Fly540.

This also represented accrued charges for air navigation services and regulatory fee.

It forced High Court Judge George Odunga to sanction the agency notices issued to four banks, directing them to remit the funds from the accounts of Fly540 aviation to KRA.

But it appears Fly540 is not new to controversies given constant dramas that have become synonymous with the airliner that was meant to cushion Kenyans braving hard economic times.

An observer noted that the troubled airliner should be a no-go zone if confessions by a section of clients in review are anything to go by.

Runway Incident 

Kenya Civil Aviation Authority (KCAA) has kicked off investigations into the Fly 540 aircraft which stalled on the runway for almost four hours.

Yesterday, February 24, an incident happened at about 5 pm when Fly540’s Dash 8 aircraft developed a nose wheel steering jam on entry into the runway at Jomo Kenyatta International Airport through one of the taxways.

According to KCAA Director General Gilbert Kibe, several attempts by a number of engineering teams from different airlines faced challenges to remove the aircraft taking into account the need to avoid a breakage of the nose wheel and it took four and half hours to remove it.

The incident caused 15 diversions to Mombasa, Kilimanjaro, Entebbe and Dar es Salaam while four flights failed to take off.

JKIA Runway has been closed since 5.20pm due to Fly540 Dash 8 Aircraft being disabled on the runway.

No landings and takeoffs. Incoming commercial flights diverted to Mombasa and Dar. KAA technicians are unable to clear the A/C off the runway. Long delays are expected in JKIA

— Robert ALAI (@RobertAlai) February 23, 2022

Many passengers were stranded until 9.30pm when operations resumed.