African airlines join forces to stave off jet-fuel price crisis
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. Derek Nseko, Founder, Airspace Africa joins CNBC Africa for more.
Wed, 11 May 2022 10:05:32 GMT
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AI Generated Summary
- The aviation sector, recovering from the effects of COVID-19, faces a new challenge due to soaring jet fuel prices caused by supply issues and global events like the Russian invasion of Ukraine.
- African airlines are uniting to negotiate better fuel prices and secure a steady supply to combat the crisis, with carriers like South African Airways and Kenya Airways working together towards this goal.
- Challenges such as weak currencies and forex issues in African countries present obstacles to accessing affordable jet fuel, prompting the industry to explore innovative strategies and cost-cutting measures for long-term sustainability.
African airlines are facing a looming crisis as the cost of jet fuel skyrockets due to supply issues and global events such as the Russian invasion of Ukraine. The aviation sector, which was just beginning to recover from the impact of COVID-19, is now grappling with another obstacle that threatens to derail progress. Derek Nseko, Founder of Airspace Africa, spoke to CNBC Africa about the challenges the industry is facing and the steps being taken to mitigate the crisis. The fuel crisis has dealt a severe blow to airlines worldwide, especially in Africa where the industry is already struggling to regain its footing post-pandemic. With travel demand on the rise and more passengers taking to the skies, the increased fuel prices have put a strain on airlines' operations and finances. This has led to growing frustration within the aviation sector, with some airlines even threatening drastic measures like grounding aircraft. In response to this escalating crisis, African airlines are coming together to negotiate better prices and ensure a steady supply of jet fuel. South African Airways and Kenya Airways are among the carriers collaborating to secure a full-year supply of fuel by June 2023. While this collective approach offers a glimmer of hope, challenges remain. The weak currencies in many African countries pose a significant hurdle as oil is traded in dollars, making it more expensive for airlines operating in these regions. Additionally, the ongoing forex issues in countries like Nigeria further complicate access to fuel. Despite the obstacles, industry players are exploring new strategies and cost-cutting measures to weather the storm. The long-term sustainability of African airlines hinges on their ability to adapt to this new reality and find innovative solutions to offset the impact of soaring fuel prices. As the aviation sector battles the fuel crisis, finding a balance between operational efficiency and financial stability will be crucial for the industry's survival.
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