KQ’s Sh2.2 billion excess baggage fraud

If you travel frequently on Kenya Airways without baggage to check-in, chances are the chatty customer service agent with a killer smile who checks you in for your flight and wishes you safe flight” in a beautiful voice could be preying on you.

The details of this are contained in an audit report prepared by the audit firm Deloitte four years ago. 

The audit report on Kenya Airways reveals that the agents have devised schemes to make quick cash from desperate or crooked passengers keen on carrying all their shopping to their destination cheaply.

They take bribes and in exchange allow passengers with excess baggage to travel with their load, in effect compromising not just the safety of the whole aircraft, but even the revenues of Kenya’s national carrier.

All these games are dangerous because the net effect is that it may be difficult to tell if the plane is overloaded just by looking at the data in the check-in desk.

Luggage data plus the passenger information is used to calculate “take-off optimization”, which is the maximum weight for a safe take-off.

The report which was submitted to the audit and risk committee of the Kenya Airways’ board of directors revealed that as a result of incorrect billing, and incorrect baggage allowance, and these under-the-table waivers of excess baggage charges, the airline had lost an estimated Sh2.2 billion within six months.

The irregularities were reported in 12 stations from Nairobi (Kenya), London (UK), Amsterdam (Netherlands), Douala (Cameroon), Free Town (Sierra Leone), Mumbai (India), Johannesburg (South Africa), Hanoi (Vietnam), Guangzhou (China), Bangkok (Thailand), Hong Kong, Accra (Ghana), Paris (France), Kinshasa (DRC) and Dubai (United Arab Emirates).

The shocking revelation in the report is that it was impossible to look at the check-in data and get an accurate picture of how much revenue had come in as a result of excess baggage.

“We established that KQ does not have a centralised system that integrates all the excess baggage information of KQ passenger flights." 

The report generated from the departure control system did not have key unique fields that are critical in the identification of irregularities in excess baggage billing and allowances.

For instance, the excess baggage ticketing system that reports excess baggage revenue did not have the total weight uplifted for each passenger, the class flown, and the corresponding ticket numbers …this makes it is impracticable to audit …and implies that fraud and other irregularities in the billing and collection of excess baggage can easily go undetected,” the report reads.

 In some cases, the check-in agents transferred excess baggage from one passenger to another who had no luggage, and then, they got paid under the table for that transaction. It is a bribe, but the language KQ managers had the auditors put in the report, is “token of appreciation”.

“Transfer of excess baggage can only be successful if the check-in staff is familiar with the passengers and their schedules. This means that the check-in staff should have dealt with the passenger travelling without any baggage to know that the passenger travels without baggage,” says the Deloitte report on malfeasance at KQ.

There are also cases where the customer service assistant didn't need to know the passenger or the schedules. They just “pool” the passengers, in the sense that the excess baggage of one passenger is checked in with the baggage of another passenger who did not exceed the allowable baggage.

In exchange, the passenger with excess baggage pays the bribe to the customer service agent, boards the flight and travels. The fact that the person who weighs the baggage is the same person who manually captures the digits into the system and checks in the passenger, the auditors said, heightened the risk associated with the fraudulent manipulation of excess baggage data captured in the system.

The customer service agents get the opportunities to solicit bribes or to be bribed because the departure control system is not integrated with the weighing scale at the check-in desk.

“This is a control weakness that provides the respective agents the opportunity to manipulate actual baggage weights recorded with a limited audit trail to verify the accuracy of the captured data. As a result, the CSA can easily understate or waive EB recorded in the system and misappropriate the payments received from the respective passengers,” the auditors noted in their report.

There are also shrewd agents who have taken advantage of systemic failures to find a way to make extra cash outside the system. They check in excess baggage as “rush bags”, to mean they are high priority bags left behind from the original flight and that have to be put on alternative flights so as to get them to the passenger.

“We determined that there were instances where customer service agents had received cash payments for the excess baggage from the respective passengers, but classified the bags as “unaccompanied” or “rush bags”.

The bags are subsequently carried on a later flight. We further noted that “rush” or “unaccompanied” bags are not billed, effectively understating excess baggage revenue accruing to KQ,” the report reads.

The sad bit is that the KQ managers told the auditors that they relied “solely on whistleblowers” to detect any irregularities, and therefore the auditors concluded, that without a system to prevent, detect and report the irregularities more money is still being lost.