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The world’s 3 biggest airlines have all raised their checked baggage fees – Lifestyle – Pulselive.co.ke

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  • American Airlines has joined Delta Air Lines and United Airlines in raising the fee of one checked bag from $25 to $30, and of a second checked bag from $35 to $40.
  • The change in price begins for American Airlines tickets purchased on Friday, September 21.
  • This trend of adding additional costs to passengers in the form of ancillary fees is standard industry practice and has been used for some time. It is known as unbundling.

American Airlines has joined Delta Air Lines and United Airlines in raising the fee of one checked bag from $25 to $30, completing a hat-trick for the world’s three largest airlines and showcasing the industry-wide trend known as “unbundling.”

The change in price begins for tickets purchased on Friday, September 21.

With American Airlines’ announcement on September 20 to raise the fee on their first checked bag to $30 and a second checked bag from $35 to $40, the Fort-Worth-based carrier has quickly caught up to their national rivals.

United announced new prices for its checked bag fees on August 31. A few weeks later, on September 19, Delta declared that they would be raising their checked bag costs as well. American waited only one day to join their competitors.

For all three carriers, fees for a checked bag are increasing from $25 to $30 for a first checked bag, and from $35 to $40 for a second checked bag.

American Airlines website says that this is the first change in its domestic checked bag fees since 2010 and that they are simply following similar changes made by other airlines.

While Jet Blue set off this scramble on August 27 with their initial $30 first checked bag price hike, this trend of adding additional costs to passengers in the form of ancillary fees is standard industry practice and has been used for some time. It is known as unbundling.

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Unbundling is the practice of separating various costs of services like baggage check, security check, seat assignments, meals, wi-fi use, and early boarding into their own price points. In short, charging little fees for different elements of travel. Unbundling first began in the late 2000s when airlines recognized the necessity of gaining extra revenue to counteract the higher price of crude oil, which had hit $132 a barrel in the summer of 2008.

According to Bob Mann, President of RW Mann & Company, an airline analysis firm with over 40 years of experience in the industry, American Airlines was the first to charge $20 for a baggage check.

“With that out of the box pretty much everybody else did it,” Mann said. “It was the first big gasp of how to get unbundling started.”



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What you need to know about the Juja by-election

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The late Juja MP Francis Waititu aka Wakapee.

The Juja parliamentary seat became vacant after MP Francis Waititu succumbed to brain cancer on February 22, 2021 at MP Shah Hospital.
Waititu was elected on a Jubilee ticket during the 2017 General Election. He garnered 66,190 votes.
According to IEBC, Juja constituency has 114,761 registered voters.
The 2017 General Election had an 80 per cent voter turn-out which saw 91,801 Kenyans casting their votes in the region.  
The by-election
On Tuesday, May 18, 2021, voters in the Juja constituency will head to the polls to elect their next member of parliament.
A total of eleven candidates will square it out in the mini poll.

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Jubilee Party By-election Juja MP Nominee Susan Njeri Waititu during certificate issuance at the Party’s Headquarters in Nairobi on Wednesday, March 24, 2021. [Boniface Okendo, Standard]

Main contenders

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1. Waititu Susan Njeri – Jubilee Party
2. Ndung’u George Koimburi – Progressive Empowerment Party (PEP)
Others:
3. Mwangi Kariuki Chege – Independent
4. Kagera Eunice Wanjiru – The New Democrats (TND)
5. Kariuki Joseph Gichui –  Independent
6. Kariuki Rashid Iregi –  Independent
7. Marungo James Kariuki – Independent
8. Mburu John Njoroge – People’s Party of Kenya (PPK)
9. Ndung’u Antony Kirori – Maendeleo Chap Chap Party (MCCP)
10. Ndung’u Kennedy Gachuma – National Liberal Party (NLP)
11. Zulu Julius Thiong’o – Independent

 

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19-year-old boy charged with defiling girl three years younger

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[Courtesy]

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A 19-year-old teenager is in trouble with authorities for allegedly defiling a 16-year-old girl.
Tyson Ongaki has been charged before a Kisumu Chief Magistrate’s court and accused of intentionally defiling the minor on various dates. The crime was allegedly committed in Bomet.
The teenager who appeared before Chief Magistrate Peter Gesora however denied the offence and has been released on a Sh100,000 bond.
The court heard that after committing the offense on diverse dates between March 26, 2021 and May 14, 2021, the teenager moved to Kisumu.
He has also been charged with committing an indecent act with a minor.
An investigating officer handling the matter told the court that the suspect was arrested in Kisumu.
The magistrate directed that the matter be heard on June 15, 2021.

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KRA must ease tax filing to boost revenues

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Nikhil Hira Independent tax consultant and Director Bowmans Coulson Harney (law firm). [Courtesy]

Anyone who has been following Kenya’s budgets over the last few years will recall headlines each year saying that the country has set its largest-ever budget. 
The upcoming 2021/22 fiscal year is no exception, with Treasury Cabinet Secretary Ukur Yatani announcing a budget of Sh3.6 trillion – yes, the biggest ever! A little over Sh2 trillion will come from government revenues, with approximately Sh1.8 trillion of this from tax revenues. 
The balance will be borrowed – another common feature of the last few years. 
This year’s budget comes amidst an economic crisis brought on by the Covid-19 pandemic, with the inherent assumption that the pandemic will come to an end before the start of the next financial year. 
Given surges in infections that are being seen globally, and indeed in Kenya, this assumption may well be the deal-breaker. 
The Ministry of Health has already said that Kenya may see another wave of infections in July, fuelled by the Indian variant. This could result in more lockdowns with the associated impact on the economy and indeed revenue collections. The lack of vaccines is an issue that the government must address as a matter of great urgency if the country is to get through the pandemic without further economic woes. 
While deficits in government budgets are not uncommon, Kenya seems to be annually widening the gap between expenditure and revenues. 
If one applies this model to their household budget, the upshot will almost certainly be bankruptcy. 

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What is actually required is curtailing recurring government expenditures, which is something that the government has acknowledged in the past with proposed austerity measures. 
The reality is that Kenya has not succeeded in doing this, and the pressure on revenue collection is exacerbated. 
When you add to the high level of wastage and corruption we are witnessing, the deficit will almost certainly continue to widen. 
The responsibility for tax collection and enforcement lies with the Kenya Revenue Authority better (KRA). 
There is no doubt that the authority has improved significantly in this task since it was set up in 1995. 
The taxman estimates that 4.4 million tax returns were filed by June 30 last year, up from 3.6 million in the previous year.  While this is a significant improvement, when compared to the country’s population, this number of returns seems unusually low. 
The increase in the number of tax returns, is to a large extent, due to the online reporting system, iTax, and a major push by KRA through taxpayer education.
There is no doubt that the online system has made filing tax returns significantly easier and gone are the large queues of people witnessed at Times Tower on deadline day. 
That said, there is still much to be done to make filing returns a seamless and painless exercise. 
System downtime during filing periods is something that all of us will have experienced, although, in typical Kenyan fashion, we inevitably wait until the last day to file our returns as we do with most things! 
The spreadsheet that one uses to file a return is by no means the simplest to use.  One key issue seems to be that taxpayers are not alerted to changes in the model until they try to upload a return. 
The spreadsheet does not allow one to make it more relevant to their sources of income – in essence, it is too rigid and inflexible. KRA should be able to rectify this without too much effort.
Last year was unusual in that different rates of tax were applicable in the first quarter as compared to the rest of the year.  This followed the Covid-19 relief measures that were introduced in April 2020. 
There was much debate about whether the changes were meant to apply for the whole year or whether some form of apportionment was needed. 
In the end, the decision was made for apportionment. One can argue about what the correct treatment should be, but the issue was how long it took for the decision to be made and, indeed, to amend the iTax system. 
The age-old notion has always been that the more complex and difficult it is to file a tax return, the more likely it will be that taxpayers simply won’t file their returns. While the issue with the system has been resolved, there is an inherent administrative issue here that must be addressed. 
KRA has to be significantly more proactive in dealing with changes in rates and law to ensure the least inconvenience to taxpayers. 
The writer, Nikhil Hira, is the Director of Bowmans Kenya.
The views expressed in this article are the author’s and not necessarily those of Bowmans Kenya  

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