Key facts
- The war in Iran is causing significant strain on African airlines due to rising jet fuel prices and supply disruptions.
- African airlines already paid 17% more for jet fuel than the global average before the conflict.
- Fuel costs constitute 30-40% of operating expenses for airlines, directly impacting their financial health.
- The closure of the Strait of Hormuz by Iran has exacerbated global energy market volatility.
- Airlines are being forced to absorb costs or adjust routes and frequencies to manage the situation.
- There are renewed calls for Africa to enhance its domestic refining capacity to reduce reliance on imports.
The ongoing war in Iran is significantly straining African airlines by driving up jet fuel prices and exacerbating supply chain issues, according to the African Airlines Association (AFRAA).
AFRAA Secretary-General Abderahmane Berthe stated that the crisis is a "dire shock" for its members, as fuel costs represent between 30% and 40% of operating expenses. African carriers were already facing higher jet fuel costs, paying approximately 17% more than the global average prior to the conflict.
The situation is compounded by the closure of the Strait of Hormuz, a critical global energy corridor through which about one-fifth of the world's oil and fuel flowed before Iran effectively shut it down in February. This has amplified the effects of structural constraints faced by African airlines, such as higher procurement costs and a reduced capacity to absorb global shocks.
To cope, some airlines have implemented fuel surcharges, though most are absorbing the increased costs to avoid negatively impacting passenger demand. Berthe noted that airlines cannot pass on the full increase as it would affect demand. Supply disruptions are also causing concern at major hubs like Nairobi and Addis Ababa, impacting regional and international operations.
In response to the rising costs and fuel uncertainty, several airlines have begun adjusting their networks by cutting frequencies and reviewing routes. The crisis has intensified calls for African nations to bolster their domestic refining capabilities and decrease their reliance on imported refined jet fuel.
Berthe emphasized the need for "African solutions," pointing to projects like Nigeria's Dangote Refinery as a potential source of relief for regional fuel supply chains. Despite these challenges, the demand for air travel in Africa remains robust, with AFRAA projecting around 6% annual passenger growth. However, Berthe cautioned that sustained shocks could severely impact profitability and connectivity, stressing the importance of securing Africa's own fuel future for a resilient aviation sector.