Ebola, insecurity blamed as jet fuel use declines by 70pc

Use of jet fuel has dropped by 69 per cent to hit a five-month low, a situation that industry analysts attribute to reduced air traffic due to increased safety fears.

Ebola outbreak and Kenya Airways’ plan to turn to low-cost carriers have also been cited as reasons contributing to the low consumption of jet fuel.

Latest data from the Kenya National Bureau of Statistics (KNBS) shows that use of jet fuel declined for the fifth consecutive month to 27,900 tonnes last December, from 55,230 tonnes in July last year.

Number of flights

During 2014, it was at its highest in March at 90,920 tonnes.

The ministry of Energy and Petroleum is expected to release data on consumption for the first quarter of this year at the end of this month.

“Consumption of jet fuel depends on the number of flights. The current figures are an indicator that the tourism industry is not doing very well,” said Ms Wanjiku Manyara, general manager of the Petroleum Institute of East Africa.

“There could also be the impact of introduction of a low-cost airline locally.”

The dip in the use of jet fuel has also been attributed to the outbreak of Ebola in West Africa that resulted in withdrawal of flights to certain countries in the region.

Kenya Airways started operating its low-cost carrier, Jambojet, in April last year, targeting the market segment currently served by buses.

DECLINING PASSENGER NUMBERS

Fastjet, another budget airline, is yet to actualise its plans to re-enter the Kenyan market following a delay in obtaining clearance from the Kenya Civil Aviation Authority.

In August last year, Kenya Airways temporarily suspended flights to Liberia and Sierra Leone that had been hit by an outbreak of Ebola.

The decision contributed to the airline’s Sh10 billion loss for the half-year period to September last year. The loss was also attributed to low passenger numbers as a result of travel advisories issued by a number of countries due to growing insecurity in East Africa.

The national carrier’s management is hopeful that replacing some of the company’s old aircraft with new ones that consume less fuel will save the company Sh9 billion.

Data from KNBS shows that the number of tourist arrivals through the country’s main airports sharply declined in January this year, compared to the same period in 2014.

Jomo Kenyatta International Airport (JKIA) recorded only 40,846 arrivals in January compared to 75,906 visitors who used the airport during the same month last year.

Moi International Airport saw the number of arrivals decline from 19,853 to 10,107, during the period.

The number of visitors arriving through the two main airports declined by 46.8 per cent to 50,953 during the period.

Terror threats

Analysts predict that the decline in the uptake of jet fuel could persist this year as a result of the current terrorism threats and ongoing rehabilitation works at JKIA that has led to a reduction in the number of flights landing and taking off from the airport.

This is regardless of the fact that fuel prices have been declining following a historic drop in crude oil prices, which is expected to present the airlines with a chance to hedge on jet fuel.

“Consumption of jet fuel could keep declining this year as we do not have as many flights like in the past, partly because of ongoing maintenance projects at the airport,” said Mr James Wanjagi, an airlines analyst.

“KQ has also not yet resumed flights to West African routes, which were suspended last year.”