Mar 22, 2023

Mawazo Writing Africa

Writing about the main

African airlines stare at $4b loss over costly fuel

Africa Airlines is expected to post losses of US$4.1 billion this year as expensive fuel wipes out profits from a recovering business.

Africa Airlines Association (AFRAA) says expensive kerosene and other expenses related to operating the airlines will weigh on profits.

Kenyan airlines have had to adjust their fares upwards as fuel costs have soared, accounting for a significant portion of the expenses involved in operating the aircraft.

The cost of jet fuel has peaked at Ksh148 (US$1.25) per liter compared to Ksh100 (US$0.85) in January, putting pressure on airlines amid demand by flights unabated is low as the industry is still recovering from the impact of Covid-19.

“Full year revenue loss for African airlines for 2022 is estimated at 4.1 billion n US dollars, accounting for 23.4 percent of 2019 revenue,” AFRAA said.

The International Air Transport Association (IATA) had previously warned that rising kerosene prices were li It is very it is likely that fares will increase this year as airlines grapple with higher operating costs.

“We have had to adjust our fares due to expensive fuel which has increased our operating costs,” said Ndegwa, Chief Executive Officer of Jambojet Karanja.

However, Mr. Karanja said prices would be revised downwards in the coming days depending on fuel costs.

Safarilink Managing Director Alex Avedi said the high costs fuel has been passed on to ticket costs, making them more expensive.

“Since January, fuel costs have increased significantly, which has affected ticket costs,” he told Mr. Avedi.

The projected loss for this However, the year is lower than last, an indication that the airline industry is recovering from the massive losses suffered over the past two years as Covid-19 hit the sector.

In 2021 African airlines lost a total of US$8.6 billion in revenue due to the impact of the pandemic, r This represents 49.8% of revenue in 2019.

The recovery in intra-African passenger traffic was slowed in May due to the easing of lockdown of anti-Covid-19 restrictions in several African countries is estimated at 74%.

A total of 27 states on the continent have eased travel restrictions by lifting the requirement to test fully vaccinated passengers.