Sharp increases in jet fuel prices are putting pressure on airline operating costs and threatening increases in airfares, with South African carriers adjusting fuel surcharges.
According to IATA’s Jet Fuel Price Monitor, last updated on October 2, the average price of jet fuel in Africa reached $193,85 (R3 234,80) per barrel, an increase of 115% compared with a year earlier. Globally, the average jet fuel price rose from US$171,01 (R2 847,30) to US$187,34 (R3 119,19).
Airlink CEO, de Villiers Engelbrecht, recently confirmed that the airline’s jet fuel costs had doubled since February, subject to specific supply agreements.
FlySafair’s fuel surcharge adjustment on September 22 marked an average 33% increase over its previous increase on August 25.
“High jet fuel prices put significant pressure on airlines’ operating costs,” Kirby Gordon, Chief Marketing Officer of FlySafair, told Travel News.
According to the African Airlines Association (AFRAA), fuel can account for more than 40% of an airline's operating costs in some African markets.
Airlines seek to limit impact
Gordon said FlySafair was focusing on operational efficiencies to mitigate the impact of the higher fuel costs.
“There is no single measure that offsets an increase of this kind. It’s a combination of many small savings across the operation that adds up,” explained Gordon.
These include planning where aircraft refuel based on prices at different airports, carrying additional fuel where economical, reducing unnecessary fuel burn in collaboration with ATNS, minimising aircraft weight and maintaining fuel-efficient operating procedures.
“These are disciplines we practise all the time, but elevated fuel prices sharpen that focus further. We cannot eliminate the impact of higher fuel costs entirely, but keeping our operation as efficient as possible helps limit the pressure those increases place on ticket prices,” said Gordon.
At an industry level, associations like AFRAA are intensifying consultation with continental airlines, including SAA, to leverage collective purchasing power.
Through its Fuel Project, AFRAA is consolidating airline fuel demand across 190 airport locations, including OR Tambo International Airport, to improve airlines’ negotiated commercial terms with suppliers.
Fuel supply remains stable
Despite rising prices and ongoing geopolitical tensions in the Middle East, South Africa’s fuel imports have not been materially disrupted.
“Approximately 60% of South Africa’s fuel supply is imported, while 40% is supplied through local production. The war has not materially affected the volume of imports, but to strengthen supply resilience and address gaps identified as a result of the war, the Department of Mineral and Petroleum Resources (DMPR) has published a strategic stock policy,” said Phila Mzamo, Head of Communications at the Fuel Industry Association of South Africa.
The DMPR’s Draft Strategic Petroleum Stocks Policy proposes strengthening the country’s reserves of crude oil and refined petroleum products, including jet fuel, to improve resilience against future supply disruption.
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