Fifteen African airlines are combining approximately 2.1 billion litres of annual aviation fuel demand across around 190 locations, using collective purchasing power to negotiate better prices and commercial terms in one of the clearest examples yet of airline cooperation on the continent.
The initiative, operated through the African Airlines Association’s Joint Fuel Purchase Project, is designed to address one of the most persistent disadvantages facing African carriers: the unusually high cost of fuel.
In some African markets, fuel can account for more than 40% of an airline’s operating costs, according to AFRAA, making fuel procurement, supply reliability and quality significant determinants of airline profitability.
The scale of the programme has grown substantially from its origins. AFRAA says an early version brought together just four airlines — EgyptAir, Kenya Airways, Ethiopian Airlines and Sudan Airways — initially pooling demand at London Heathrow, Rome Fiumicino, Jeddah and Dar es Salaam.
Today, the association says 15 airlines participate in the fuel project, although its current published membership list differs from some recent reports about which carriers are involved. AFRAA’s official fuel page lists Air Botswana, Air Burkina, ASKY, Astral Aviation, Ethiopian Airlines, Kenya Airways, LAM Mozambique, Precision Air, RwandAir, South African Airways, TAAG Angola, Camair-Co, Uganda Airlines, Afrijet Business Service and SafeAir Company.
The significance of the programme lies not simply in the amount of fuel being purchased, but in how African airlines are attempting to change their relationship with suppliers.
Rather than each carrier approaching fuel companies independently, AFRAA aggregates demand at individual airports before negotiating commercial terms on behalf of participating airlines. Once a supplier is selected, however, each airline maintains its own direct contract with the supplier.
That structure allows airlines to benefit from the purchasing scale of the group without surrendering their individual commercial relationships.
Changing the way fuel is priced
AFRAA Consulting Director for Technical and Operations Gaoussou Konate said one of the project’s most important developments has been moving away from supplier-controlled “into-plane” pricing structures.
Under older arrangements, airlines could agree an into-plane price only for suppliers to revise it as market conditions changed. Under the collective procurement system, the underlying market price can still fluctuate, but the supplier differential — including the commercial margin — is negotiated against an independent pricing basis using an agreed formula.
That distinction is important because the project cannot insulate airlines from changes in global oil prices. What it can do is provide greater transparency over the additional costs and margins between the commodity price and what an airline ultimately pays to put fuel into an aircraft.
The combined volume also changes the bargaining position.
A relatively small African airline purchasing fuel independently at an overseas station may have little leverage with a major supplier. Fifteen airlines collectively representing more than two billion litres of annual demand present a considerably larger commercial opportunity.
AFRAA says suppliers now actively compete during its fuel tenders. Contracts generally operate for 12 months, allowing participating airlines to return to the market collectively during subsequent procurement cycles.
A programme almost three decades in the making
The concept predates the current fuel programme.
AFRAA traces its origins to 1996, when the association examined savings generated through a joint procurement programme for Boeing 737-200 tyres and considered whether the same principle could be applied to fuel.
After an interruption, the fuel initiative was revived in 2011 and subsequently expanded. AFRAA reported in 2021 that the programme had generated approximately US$55 million in cumulative savings for participating airlines since its establishment.
The programme has since grown both geographically and in the amount of fuel represented.
It is particularly valuable for smaller carriers, which individually may lack the volumes necessary to command favourable commercial terms. But AFRAA argues that larger airlines can also benefit because their own purchasing volumes become part of an even larger negotiating pool.
That dynamic represents a relatively unusual form of cooperation in an African airline industry that remains highly fragmented.
More than cheaper fuel
The project also addresses fuel quality and security of supply.
Operating across roughly 190 locations means participating airlines encounter very different fuel infrastructure, regulatory regimes and supply chains. AFRAA says quality oversight therefore forms part of the procurement process alongside price, while the association also seeks to limit unnecessary intermediaries and improve visibility into costs such as transport, pipelines and storage.
The recent volatility in global energy markets has added another dimension to the initiative.
While collective procurement cannot prevent movements in the underlying commodity price, negotiated supplier margins provide some protection against additional commercial volatility. Airlines can also coordinate operational responses when fuel availability becomes constrained, including carrying additional fuel from stations with more reliable supply.
AFRAA has argued more broadly that Africa’s dependence on external refining and supply chains remains a structural weakness despite several countries on the continent being major crude-oil producers.
SAF enters the equation
The initiative is also beginning to extend beyond conventional jet fuel as African airlines prepare for the gradual introduction of Sustainable Aviation Fuel.
Earlier this year, AFRAA signed an agreement with AfriSAF aimed at accelerating SAF production and deployment in Africa, including developing viable production projects, strengthening feedstock supply chains and supporting policy development.
AFRAA says the fuel procurement project is already beginning to accommodate SAF, potentially giving airlines another mechanism for aggregating demand as sustainable fuel requirements increase.
The association is also studying whether the same purchasing model could eventually be extended to other common airline inputs. Hydraulic fluids and aviation grease have been identified as potential candidates, although aircraft components present greater difficulties because of differences in fleets, certification requirements and technical specifications.
A model for wider African airline cooperation
The significance of the 2.1-billion-litre programme ultimately extends beyond fuel.
African airlines frequently operate at a structural cost disadvantage caused by relatively small fleets, fragmented markets, high taxes and charges, limited economies of scale and expensive supply chains. Many of those problems cannot be solved by an individual airline regardless of how efficiently it is managed.
Collective procurement offers a different approach: airlines do not have to merge or surrender their commercial independence to create scale in areas where their interests overlap.
AFRAA is already applying a similar philosophy elsewhere. Its Route Network Cooperation project seeks greater commercial coordination between airlines, while its Ground Handling Committee is examining joint procurement of ground services at selected airports.
That may ultimately be the more consequential story behind the fuel programme.
African aviation has spent decades discussing greater cooperation between airlines, usually in the context of alliances, consolidation, liberalisation and cross-border ownership. The fuel project demonstrates that cooperation can also begin much further down the operating chain.
Fifteen airlines may remain competitors when selling tickets. But when they enter the fuel market together with 2.1 billion litres of demand, fragmentation can temporarily become scale.
And in an industry where a few percentage points of operating cost can determine the difference between profit and loss, that collective leverage could matter considerably.
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