Kenya Airways says the conflict in the Middle East is putting further pressure on its operations and finances.

The airline says fuel costs rose by 72% in the first half of the year, while disruptions have also delayed the delivery of spare parts and the maintenance of aircraft.

The sharp increase in fuel costs is putting fresh pressure on Kenya Airways, highlighting how a conflict thousands of kilometres away in the Middle East is now being felt across Africa’s aviation industry through higher operating costs, supply chain disruptions and growing pressure on airlines to remain profitable.

Chief Economist at Mentoria Economics Ken Gichinga: “This is going to be a significant challenge to the national carrier, not least due to the tough economic times facing the economy. Obviously, a cost in fuel prices will mean higher airfare. And at a time when competition is offering much more competitive pricing, it will be a challenge to be able to add the additional costs. That said, the company is looking for a strategic investor to put in about one billion to $1.5 billion.”

Beyond Kenya Airways, economist Dr Patric Muide explains what the fuel shock could mean for African airlines and economies, particularly if the Middle East conflict persists and oil and jet fuel prices remain high.

“Disruption to oil market for oil are unpredictable. It is estimated that jet fuels can go to as high as 40% to 55% of the operating cost for an airline. So that means that for many airlines, they operate on very thin margins. So any escalations on their jet fuel cost can easily push even good or well-managed airlines into loss-making territory.

–ChannelAfrica–