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African airlines are working together in a bid to negotiate better prices and a steady flow of jet fuel.
African airlines are working together in a bid to negotiate better prices and a steady flow of jet fuel.
Image: Bloomberg

African airlines 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 carriers such as SAA and Kenya Airways — to secure deliveries for 12 months starting in July, African Airlines 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 airlines threatened to stop flying until further notice in response to surging fuel prices after 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 SA, 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% of operating costs for African airlines from 20% previously, Kenya Airways CEO Allan Kilavuka said during the Nairobi briefing.

“We are looking at other areas where we can control costs,” Kilavuka said. Kenya 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.”

More stories like this are available on bloomberg.com
Bloomberg 

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