The Competition Authority of Kenya (CAK) has ordered the immediate halting of Fly540 operations responding to the increased instances of passenger complaints like advertising with false information, delays in making refunds, and cancellation of flights on short notice.
The airline’s license expired in September 2022 and it has been operating illegally without a valid license, CAK said.
CAK director-general Boniface Makongo said in an order to Fly540 airline chief executive Donald Smith Earle: “Fly540 Limited is hereby directed by the authority to with immediate effect, cease and desist from advertising for flight bookings in electronic, print, and social media or receiving any flight bookings from the public or their representatives and or in any other way holding yourselves as being in a position to offer flight and related services to customers to and from any of the airports within the Republic of Kenya until the ongoing investigations are completed.”
CAK has ordered the airline to refund the money to passengers for tickets sold from September 30, 2022 till date. Also, the airlines need to refund the canceled flight amount to passengers within 30 days from the date of the order. A failure to comply with the CAK order would lead to a fine of Sh500,000 or a jail term of five years or both.
“The authority is aware that your Air Operator Certificate expired September 30, and accordingly you are not authorized to offer services. Equally, we are aware that you have suspended operations at the Jomo Kenyatta International Airline (JKIA) terminal 1D/ Terminal 2, and your offices at Watermark Business Park, Karen remains inaccessible to the affected public,” added Mr Makongo.
From its base at the JKIA, Fly540 serves domestic destinations such as Eldoret, Kakamega, Kisumu, Lamu, and Malindi.
The airline has been competing with domestic airlines on similar routes including Jambojet, which also operates from its hub at JKIA, Safarilink, Skyward Express, 748 Air Services, and Renegade Air.
Fly540 also operates international routes including Zanzibar and Entebbe.
Last year, the International Air Transport Association (IATA) suspended the airline from its electronic Billing and Settlement Plan (BSP), tied to a major travel agent defaulting.