Airlines in Africa Hit by Jet Fuel Surge After War on Iran

Jet fuel price volatility driven by the late February U.S.-Israeli war on Iran is rapidly reshaping aviation economics across Africa.

Africa’s exposure stems from its reliance on imported refined fuel, with around 70% of jet fuel and kerosene imports transiting the Strait of Hormuz, according to S&P Global.

Since the conflict began, flows through the strait have “almost ground to a halt,” removing roughly 20% of global oil and liquefied natural gas supplies from markets.

Operators report extreme price instability. “By the time you get there, the price has changed,” said Jannie de Klerk of South Africa’s National Airways Corporation. He cited a flight where fuel rose by 6 rand per litre to R24 within 10 hours. “The instability of (jet fuel) prices makes it very challenging to move around,” he added.

Benchmark prices reflect the shock. Jet fuel in north-west Europe reached about $239 per barrel, while Asian prices approached $200. Brent crude settled at $112.19 per barrel, its highest since 2022. These global shifts feed directly into African markets with limited buffering capacity.

African carriers face disproportionate exposure. Jet fuel accounts for 30% to over 40% of operating costs on the continent, compared with 20% to 25% globally.

For FlySafair, fuel represents 50% to 55% of direct costs. The airline estimates an additional R35,000 per flight hour for its 37 Boeing 737-800 aircraft, which collectively can perform up to 165 flights per day.

Price spikes have been abrupt. Coastal South African airports recorded increases of 70% in a single week. Airlines have responded with surcharges ranging from 101 to 367 rand and contractual clauses allowing cost pass-through during flights.

Fuel availability is tightening alongside rising prices. South Africa holds about three to four weeks of jet fuel stocks, Kenya around 50 days as of March 10, and Zambia just 10 days. Airlines warn that near-term supply is manageable but uncertain beyond March and April.

Airlink CEO de Villiers Engelbrecht said, “Shock price adjustments tend to be more immediate, while stock shortages are more predictable and, in theory, easier to manage.” Airlines are considering capacity reductions to control variable costs.

Structural constraints worsen the situation. Africa’s refining capacity remains limited, with only two operational refineries in South Africa after closures in 2020 and 2022.

Countries such as Kenya, Madagascar, and South Africa are particularly exposed due to reliance on imports.

Globally, Gulf refineries exported about 475,000 barrels per day of jet fuel in February, with roughly 400,000 bpd passing through Hormuz. Europe consumed about 75% of these flows last year, while accounting for just under 20% of global demand.

China has moved to protect domestic supply by banning exports of refined fuels until at least the end of March.