Air Malawi, 8 others in joint fuel purchase deal
Air Malawi and eight other members of the African Airlines Association (Afraa) last week launched a joint fuel purchase programme aimed at attaining better and stable unit price of fuel for the participating airlines.
Other airlines in the current initiative are Air Namibia, Air Seychelles, Ethiopian Airlines, Kenya Airways, LAM Mozambique Airlines, Precision Air, Rwandair and TAAG Angola Airlines.
The launch of the initiative followed the conclusion of evaluation of tender bids received from a number of fuel companies.
Air Malawi chief executive officer Patrick Chilambe told Business News on Tuesday that the arrangement will help the airline to save money on buying fuel which constitutes a significant amount of the airline’s operating costs.
Chilambe said once the arrangement is operational, Air Malawi should pass on the savings made on the acquisition of fuel onto customers.
The project also seeks to assure quality of the product and supply reliability while the relevant fuel suppliers will benefit from higher fuel volumes purchased by airlines.
Cost of fuel remains a major component of the operating expense of every airline, accounting for between 40-50 percent of total direct operating costs.
In addition to the cost, the unpredictable nature of fuel prices makes it difficult for airlines to budget the cost of their operations.
The arrangement also seeks to address the incidents of high taxes, charges and fees levied on fuel, especially in African airports and lobbying stakeholders for the elimination of monopoly by fuel suppliers at some airports.
“Though it was not disclosed what savings airlines expect to make under this project, all participating airlines are confident of significant savings, making the project worthwhile. This marks a turning point in the association’s quest to add value to its members,†reads a statement from Afraa.
