Fly540 (FFV, Nairobi Jomo Kenyatta) has been ordered to stop flying following the expiry of its air operator's certificate (AOC) and more than 50 consumer complaints lodged with the Competition Authority of Kenya (CAK).

The Kenya Civil Aviation Authority (KCAA) confirmed to ch-aviation that Fly540's AOC expired on September 30, 2022.

The CAK issued a "cease and desist" order against Fly540 on November 16, 2022, suggesting the airline had continued to sell flights after its permit expired: "Fly540 is hereby directed to, with immediate effect, cease and desist from advertising flight bookings through electronic, print and social media, or receive any flight bookings from the public or travel agents until the ongoing investigations are completed. In a letter to the airline, CAK said: "The Authority is aware that your air operator certificate (AOC) expired on September 30, 2022, and accordingly, you are not authorised to offer services. Equally, we are aware that you have suspended operations at the [Nairobi Jomo Kenyatta] JKIA terminal 1D/terminal 2 and your offices at Watermark Business Park‚ Karen remain inaccessible to the affected public."

Asked for comment, Chief Executive Officer Don Smith told ch-aviation by email that the order was "factually incorrect". "We suspended flying on October 1, 2022. The order is factually incorrect as we also stopped selling on that date. We are refunding bona fide passengers, but we are dealing with a lot of fraud, hence the delays."

According to the authority, consumer complaints against the airline include:

  • false and misleading information on its capability to provide air transport and the possibility of amending flight itineraries;
  • arbitrary and/or short-notice flight cancellations; and
  • inordinate delays in refunding consumers.

In a statement, the authority said it was investigating whether the airline had contravened Section 55 of Kenya's Competition Act, "outlawing false and misleading representation", and Section 56 on "unconscionable conduct while undertaking its commercial activities". The order against Fly540 aimed to "protect the public interest and prevent serious and irreparable damage to Kenyans," it stated. CAK stated it had issued a previous warning to Fly540 on July 29, 2022, but had continued to receive consumer complaints indicating non-compliance with the provisions of the law.

Fly540 has been ordered to refund within 30 days:

  • all money received from tickets sold from September 30 to date;
  • all money received from tickets sold before September 30 but where flights were cancelled arbitrarily;
  • to revert to CAK with evidence of the refunds by November 30, 2022;
  • to immediately notify travel agents to stop selling Fly540 tickets;
  • to furnish evidence of compliance with the order to CAK within seven days.

Failure to comply with the order could result in a fine of KES500,000 shillings (USD4,000) or five years imprisonment of the airline's directors, or both, the authority warned.

According to the ch-aviation fleets module, Fly540's fleet of three in-house aircraft is virtually grounded, with only one DHC-8-Q200, 5Y-CGL (msn 426), in active service. Its single CRJ200LR is parked at Wilson Airport, and its only DHC-8-Q300 is stored at Malindi.

Fly540's sister carrier EastAfrican (EXZ, Nairobi Jomo Kenyatta) - a safari and private charter carrier - was not affected by the order, Chief Executive Officer George Kivindyo confirmed to ch-aviation. The airline operates with one in-house DHC-8-300, according to ch-aviation fleets data.

In January 2021, the International Air Transport Association (IATA) suspended Fly540 from its electronic Billing and Settlement Plan (BSP), usually an indication of failure to pay outstanding accounts. At the time, Fly540 Chief Executive Officer Don Smith told ch-aviation the suspension had no impact on the airline as it had not been part of the BSP for two years as the airline mainly sold directly to consumers and not through travel agents. BSP is a central clearing house for airline tickets sold by IATA-accredited travel agents on behalf of IATA-member airlines.