☛ Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily
20 January 2012 | Angeline Albert
A group of nine African airlines, including
operators in Angola, Mozambique and Namibia, will buy fuel worth $1.5 billion
together to get a cheaper, better quality and more reliable supply.
TAAG Angola Airlines,
LAM Mozambique Airlines and Air Namibia are among
the nine members of the industry body the African Airlines Association (AFRAA) collaborating in a joint fuel
procurement deal, which was initiated by the trade organisation.
A total of 700 million litres of fuel is to
be bought for 2012 under the agreement by the participating AFRAA members.
Others involved in the deal include Air Malawi, Kenya Airlines,
Ethiopian Airlines,
Rwandair,
Precision Air and Air Seychelles.
Different suppliers have been awarded
contracts to provide fuel for airports at specific geographical locations. The
start dates for the fuel contracts with the airlines vary, with some starting
in February but all will end by 31 December 2012.
The launch of the agreement follows the
creation of AFRAA’s Joint Fuel Steering Committee last year, made up of
representatives from the airlines, which sent out tenders to fuel suppliers
serving airports around the world and led to bids being evaluated by the
airlines.
AFRAA hopes collaborative purchasing will
result in cheaper, stable prices, quality fuel and a reliable supply for the
participating flight operators, but none of the airlines would disclose how
much money they hoped to save as a result of the agreement. AFRAA said fuel
makes up 40 to 50 per cent of an airline’s direct operating costs.
Another joint fuel tendering process will
take place this year for the 2013 calendar year. The trade body, which has 32
members, expects more of its members will participate in this upcoming
procurement process. The committee is also considering how they can prevent
high taxes and levies placed on fuel at certain African airports.
