06/09/2024
Event Africa caught up with , CEO of the Airlines Association of Southern Africa, after his panel discussion at the Africa Tourism Leadership Conference in Botswana. Mr Munetsi shared some hard-hitting insights and solutions to the lack of intra-Africa travel and connectivity and also the “dysfunctional way” airport charges, fees, levies and taxes actually act as a disincentive for people to travel.
“So having identified that definitely there's not enough intra-Africa connectivity (and that) African airlines do not offer enough flights between destinations on the African
continent, we are now saying to the airlines, ‘We want you to understand that when you build the network in terms of city pairs, you will be offering facilities for us to travel, not only for leisure but also for trade.
“But for us it was even more important to address the issue of the cost. For example, the International Air Transport Association (IATA) was commissioned by the African Union to do a study of connectivity and costs on the African continent. You won't believe it! The cost of JET A-1 in Africa is 39% higher than anywhere else in the world, and yet we have crude oil producers on the continent. We don't even have a functional refinery that we can use to refine JET A-1. So we are competing on the world stage with other economies that are bigger than us, they can bid better than we do, and they end up with much cheaper fuel than we do. Now we are not even talking about sustainable aviation fuel. On the African continent, we have enough feedstock to be able to produce sustainable aviation fuel, however the number of flights that we operate does not sustain the cost of establishing a sustainable aviation fuel refinery. If we can't refine JET A-1, there's no way we can even talk about sustainable aviation fuel.
“We also discussed the taxes and fees that are levied by airports, by civil aviation authorities. When you look, for example, at a flight from let's say Lagos to Accra, it's a 45-minute flight. You end up paying something like 620 dollars for a 45-minute flight. (Regarding) the airline’s retention of that 620 dollars, they are lucky if they get 150 dollars, the rest goes towards taxes, fees, levies, air traffic navigation services costs, and so forth. And we are saying when we do that, we need to make cost containment a priority to the authorities themselves. They must not go buy fancy cars and all those other things, whistles and bells, when they are not even providing you the customer with the service that you require. So, for example you get on a flight and you’ve paid a safety fee of let’s say 35 to 40 dollars, you get to your destination, your bag has been pilfered, so you are actually done in because you’ve paid for your bag to be secure and yet when you get to your destination, your bag has been pilfered, which means that the security system that you’ve paid for is not in place. So the fees, taxes and charges are a major impediment for the growth, but we are saying yes we understand, yes it’s a business that you are managing, but there are means and ways that you can do this business together with us, so let us all sit in the same room and discuss how we are go forward.”
Mr Munetsi's easy solution to the issue of high jet fuel prices is fuel pooling or combined purchasing. He explains: “I think it's very easy for us to do what I would call a JET A-1 fuel pooling. So if, for example, you look at OR Tambo International or Jomo Kenyatta or Addis Ababa Bole, and the airlines that operate into that airport come together and say, we're going to do combined purchasing. Not that every airline buys on their own. If they do combined purchasing, economies of scale kick in, and you're able to bring down the costs. “Number two, the security of supply becomes even better, because now you are talking to the refinery to say, ‘We are ordering so many tons of jet A1 per month, and this is the price, and this is how you must deliver it to us.””