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African airlines join forces to stave off potential jet-fuel price crisis

A committee has been formed -- including major carriers such as South African Airways and Kenya Airways -- to secure deliveries for 12 months starting in July

Topics
Jet Fuel | airlines | Kenya

Bloomberg 

Kenya Airways
Kenya Airways was already struggling to survive before the recent upheaval, suffering years of losses and rising debt. Photo: Reuters.

African are clubbing together to negotiate better prices and a steady flow of jet fuel, a move to help stave off a potential crisis caused by supply issues and soaring costs.

A committee has been formed -- including major carriers such as South African Airways and Airways -- to secure deliveries for 12 months starting in July, African Association Secretary-General Abderahmane Berthe said during a briefing in the Kenyan capital, Nairobi.

“We are in the last round of negotiations, the process will end in June,” he said.

The talks started even before a weekend of turmoil in Nigeria, Africa’s most populous country, where threatened to stop flying until further notice in response to surging fuel prices following Russia’s invasion of Ukraine. They later called off the plan after the government agreed to hold talks with The Airline Operators of Nigeria trade group to try and seek a resolution. Nigeria has 23 carriers, mostly very small.

In South Africa, the country’s airports operator said some airlines have been cancelling flights due to fuel-supply issues and pledged to remedy the situation.

Jet-fuel prices have escalated to an average of almost 30 per cent of operating costs for African airlines from 20 per cent previously, Airways Chief Executive Officer Allan Kilavuka said during the Nairobi briefing.

“We are looking at other areas where we can control costs,” the CEO said. Airways was already struggling to survive before the recent upheaval, suffering years of losses and rising debt.

The African Airlines Association’s Berthe said one of the continent’s long-standing aviation problems is there are too many airlines for the amount of travel demand.

“Every country wants to have a national carrier, they want to create a hub – this is not possible,” he said. “We may need six or seven global operators and some intra-African operators with the two systems working together to create code share agreements.”

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First Published: Wed, May 11 2022. 00:33 IST
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