AFRAA’s relevance reaffirmed as it reports huge savings in fuel expenses for members

AFRAA SAVES MEMBERS OVER 30 MILLION US DOLLARS THROUGH CHEAPER FUEL

(Posted 07th May 2014)

During the 3rd AFRAA Convention for Aviation Suppliers and Stakeholders did eTN catch up with the organization’s Secretary General Dr. Elijah Chingosho to talk about AFRAA’s objectives and relevance to its members. The Nairobi based continental aviation body, generally perceived to be an advocacy and lobby group for African Airlines, and working closely with global body IATA as well as ICAO, now has 29 leading airlines from across the continent as paid up members, covering all the key players from Egypt to South Africa and from Kenya to Nigeria. AFRAA partners with such aviation manufacturers like Airbus, Boeing, Embraer and Bombardier, with engine manufacturers like General Electric Aviation, Pratt & Whitney and Rolls Royce and with aviation consultancies like Lufthansa Consulting and service providers like SITA and Sabre among many others, constantly engaged in seeking to press home commercial advantages for member airlines.

(Dr. Elijah Chingosho, the man at the helm of AFRAA)

Besides being engaged in and supportive of joint Africa wide training initiatives and providing a platform for route development discussions, has AFRAA’s joint fuel purchasing project, which was launched nearly 4 years ago, become the most important success story, no wonder when fuel cost now in average amount to 40 percent of the airlines’ expenses.

Initially a slow starter did membership in the scheme already significantly rise the year after the launch and for 2013 alone did AFRAA give the figure of about 30 million US Dollars in savings for participating carriers, which constitutes a major boost for financial bottom lines.

The 9 airlines listed by AFRAA to be part of the mechanism, more are expected to come in soon, are Air Seychelles, Air Malawi, Air Namibia, LAM Mozambique, Precision Air, RwandAir, TAAG, Ethiopian Airlines and last but not least Kenya Airways and considering the value the scheme brought to participating carriers it is no surprise that the team responsible to negotiate with fuel suppliers did win a special price at the Gala Dinner AFRAA held in Nairobi earlier in the week, recognizing the individuals seconded by their airlines to the committee managing the scheme.

Bolstered by the success of this novel way of creating value for member airlines has AFRAA now also began to put together a similar scheme to negotiate savings for ground handling, which equally is seen as a major expense where cooperative negotiations can bring about volume discounts and rebates and where handling can be pooled towards that end.

Notably did at this 03rd Convention the UNWTO have an observer present and none less than Elsia Grandcourt, the Director for Africa, who had just come from the 56th Commission for Africa meeting in Luanda, where UNWTO reaffirmed their groundbreaking first meeting between member states Tourism and Transport Ministers in October in the Seychelles, which will be jointly hosted by UNWTO and ICAO to finally bring a more holistic view into focus and widen the stakeholder net when it comes to discussing and taking crucial decisions affecting the closely linked aviation and tourism sectors.

Dr. Chingosho welcomed the UNWTO’s meeting resolution that the African Union was advised to drop any attempt to saddle the hospitality and aviation sector on the continent with yet more fees and levies and reiterated that AFRAA was to continue their advocacy programme with African governments to reduce taxes levied on their national airlines in order to keep them competitive against the European legacy carriers and the new world powerhouses in aviation, the three major Gulf airlines. Only 20 percent of the traffic in and out of Africa is presently being carried by African airlines, a sharp downturn from the days when reciprocity in bilateral air services agreements assured a far more equitable distribution, and the meeting in Nairobi left no doubt that it will take a range of measures, including the removal of prohibitive taxes – Kenya was cited as a key example where a patently misdirected decision by parliament to slap VAT on aircraft spare parts and purchases will saddle KQ with a 14+ billion Kenya Shillings tax bill, and an expense none of the airline’s main competitors has to face – to ensure the survival of Africa’s leading carriers and not turn them into fringe operators used to feed and defeed traffic for the big league.

The 2014 Annual General Assembly will this year take place in Algiers with Air Algeria will be the host airline in the November event but more details on the calendar of AFRAA events and the range of initiative and projects they are engaged in on behalf of their members, can be found via www.afraa.org

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