South Africa’s jet fuel supply remains secure until at least the end of May, but rising operational costs are expected to push airfares higher.
Despite steady reserves and imports, jet fuel prices at coastal South African airports have increased by over 145% due to geopolitical tension and maritime blockades in the Middle East. Inland airports are expected to see similar price increases from early April.
“All major airport hubs, including OR Tambo International Airport and Cape Town International Airport, are currently well stocked with jet fuel and there is no threat to supply,” said Phila Mzamo, Head of Communications at Fuels Industry Association of South Africa. “Both airports continue to receive stable and uninterrupted supply from a combination of imports and local refinery production.
“The ongoing geopolitical developments in the Middle East have not disrupted South Africa’s supply, as the industry successfully diversified sources, optimised import routes, and maintained sufficient local production through Natref.”
The burden on airlines
While supply remains stable, the cost of sourcing fuel at South African airports is increasing, forcing airlines to hike their airfares and potentially adjust their schedules.
"Fuel supply is Airlines Association of Southern Africa’s (AASA) biggest concern, as airlines’ ability to maintain their schedules – which is the basis of the promises they make to their customers – depends on it,” Aaron Munetsi, CEO of AASA, told Tourism Update.
He said airlines typically absorbed some cost increases but must eventually pass these on to customers to remain sustainable.
Both Airlink and FlySafair reported that they did not expect to face any fuel supply constraints in the coming months and that they were ready to accommodate high demand over Easter and the school holiday peak season. However, the airlines may have to consider route consolidation or capacity adjustments, should the situation continue beyond then.
“The situation is fluid and ultimately depends on how the broader situation develops,” said Kirby Gordon, Chief Marketing Manager of FlySafair.
“If current conditions persist, it would be prudent to keep a close eye on capacity and adjust where necessary. Our approach is always to retain connectivity on thinner routes where possible, while continuously reviewing demand and operational realities.”
Airlink CEO, de Villiers Engelbrecht, explained that, while the airline used sophisticated software to optimise its fuel costs and consumption, and its operations remained stable, Airlink, with consideration for its customers’ convenience, might marginally consolidate flights or change gauge on certain routes.
George Mothema, CEO of the Board of Airlines Representatives of Southern Africa (Barsa), said: “Airlines are monitoring developments in global fuel markets, pricing dynamics across different supply points and the timing between ticket sales and fuel procurement. These factors are managed through normal commercial and operational planning processes, including network optimisation and cost management.”
Mitigation measures
While airlines were not opting for extraordinary tankering (carrying additional fuel) on South African routes, some airlines were utilising standard commercial practices such as hedging (securing their fuel price for a specific amount of time) and ongoing optimisation of fuel uplift strategies across their networks to manage price variability and supply considerations, said Mothema.
“At present, South Africa’s airport network has stable and reliable jet fuel supply, and therefore no tankering is expected or required at any of our airports. FIASA continues to collaborate with Acsa, Barsa, and fuel suppliers to maintain operational stability and ensure aligned decision-making should conditions change,” said Mzamo.
FIASA, Barsa and Acsa are also engaging with other stakeholders to improve information-sharing on fuel supply status and early identification of potential constraints.
“While there has been progress, Barsa continues to support more structured and timely communication mechanisms to assist operational planning,” said Mothema.
