High jet fuel prices hurt struggling airlines
Global rise in cost of jet fuel is threatening to wipe the gains made in the aviation sector despite lifting of restriction measures by a majority of countries.
The continental Aviation body African Airlines Association, the rising jet fuel has hiked air tickets impacting on the airlines cash-flows.
“From the mid May average price of 146.5/barrel of crude oil, Platts estimates the impact on airlines 2022 fuel bill is Sh12.1 trillion ($121.1 billion),” AFRAA said in a statement.
Last year, African airlines cumulatively lost Sh860 billion in revenues due to the impact of the pandemic, representing 49.8 per cent of 2019 revenues.
National carrier Kenya Airways net loss dropped by 56.58 per cent to Sh15.88 billion for the year ended December compared with a record loss of Sh36.57 billion a year earlier when Covid restrictions hit its operations, including grounding of its plane for months.
Energy markets
Total income increased by 32.98 per cent to Sh70.22 billion while operating costs fell 3.62 percent to Sh77.02 billion.
This as S&P Global Platts, a market data and analysis firm that offers a full view of the energy markets, warns that the average jet fuel price continues to rise globally impacting on airline operating costs further. In the month of May 2022, AFRAA estimates that African airlines’ capacity deployed reached 76.6 per cent of 2019 capacity and the traffic recovery is now at 66.3 per cent of 2019 pre-Covid level.
The Kenyan markets however remain dominant in both capacity and actual passenger carried with domestic demand at 42.1 per cent. It outperformed intra-Africa and intercontinental which remained subdued at 30.2 per cent and 27.7 per cent respectively.
