Business Day (Johannesburg)

South Africa: Airlines Face Huge Fuel Bills at King Shaka

Johannesburg — AIRLINES using Acsa's new King Shaka Airport, north of Durban, will have to fork out millions more than they are paying for fuel at Durban International Airport.

There is no fuel pipeline linking Engen's refinery south of the city to the new airport and fuel will have to be trucked to its fuel depot, adding to escalating costs.

Gidon Novick, joint CEO of airline group Comair , said yesterday its calculations showed the cost of trucking the fuel would be about 20c extra a litre, adding R7m-R8m to the group's monthly fuel bill.

This will add to the operating costs of airlines, which already face a potential 133% rise in tariffs from Acsa from next year, driven up largely by the R6,7bn bill for construction of the new airport.

Airlines have been vocal in their opposition to the new airport, which they see as an unnecessary expense and the costs of which would make air travel unaffordable.

The added fuel cost is a further blow. Novick said the costs related to the new airport would push up airfares, putting air travel beyond the reach of many travellers.

Glenn Orsmond, CEO of airline group 1Time , said if Acsa was granted a 133% increase in airport charges together with the rise in fuel price, the airline would be forced to raise its airfares.

"It will be a huge knock."

Willem Oosthuizen, general manager of the Engen refinery, said while the cost of transport would add to the cost of fuel, it would be less than 10c/l .

"The oil companies are likely to factor costs into their tender process so the airlines have to adjust their prices upward by a few percent to remain at a similar level of profitability," said Oosthuizen.

Bongani Maseko, operations director at Acsa, said a dedicated pipeline would not be cost-effective and the only reason the current airport had a pipeline was because the Engen refinery was 600m from it.

"The anticipated consumption at the new airport is exactly the same as the existing site and will equate to about 1,4-million litres per week," he said.

Cape Town International Airport currently consumes about 2,1-million litres per day and the fuel is trucked from a refinery 21km away. Once demand reached 2-million litres per day a pipeline would most probably become the preferred transport medium, Maseko said.


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