High fuel prices to halt recovery for airlines
The surge in the price of jet fuel is threatening the recovery of the African Aviation, sector players have warned.
According to the African Airlines Association (AFRAA), the conflict between Russia and Ukraine triggered the increase in jet fuel prices, and rising costs of travel, which has the potential to slow down the travel recovery.
This even as most airlines continue to reel in losses as operators continued to battle cash-flow challenges.
In March 2022, AFRAA estimates that “African airlines’ capacity reached 67.3 per cent compared to the same month in 2019. Similarly, traffic is estimated at 56 per cent.
Total impact on aviation
Platts, a leading global provider of energy and metals information, estimates that the total impact on the overall jet fuel bill will reach Sh992 billion ($8.6b) based on an estimated average price of $115 per barrel.
The African aviation sector recorded an Sh542 billion ($4.7billion) full-year revenue loss in 2022.
Despite the tough operating environment domestic market remained bullish with the biggest share for both capacity and actual passenger carried.
Kenya Airways(KQ) has begun reforms meant to return the airline to profitability by trimming its network and rationalising its flight frequencies to revive it from losses.
“The Government as a major shareholder is supporting the restructuring of Kenya Airways to adapt to the challenges facing the aviation industry,” Treasury Cabinet Secretary Ukur Yatani said.