Cargo Planes Hike Fuel Fees

The action may restrict the range of items that can be transported by air, which would retard the expansion of the airline cargo industry.

A fuel surcharge of between Sh11 and Sh41 per kilogram has been added by Nairobi-based carriers to the cost of transporting goods as a result of the high cost of jet fuel.

Airlines added the special levy to protect their margins as a result of the commodity’s 36 percent price increase over the previous six months.

From Sh100 per litre in January, the price of jet fuel has increased to a high of Sh136, forcing airlines to pass on the higher price to customers in order to stay in business.

The action may restrict the range of items that can be transported by air, which would retard the expansion of the airline cargo industry.

Conversely, those who use airlines have higher operating costs.

Transporters impose a fuel surcharge as an additional cost to cover an unexpectedly high rise in fuel prices.

The chief executive of Jambojet, Karanja Ndegwa, acknowledged that the demand for cargo business had increased in its markets over the past few months but insisted that there was nothing they could do but raise the fees.

“We have added a fuel surcharge of $0.1 (Sh11.87) per kilogramme but this will be dropped once the jet fuel prices go back to budget levels,” he said.

Jambojet started cargo operations in February after receiving regulatory approvals from the Kenya Civil Aviation Authority to fly goods on its passenger flights to local and regional destinations.

The airline transports both passengers and cargo on its routes using a Dash 8-Q400 type of aircraft. Up to 1.5 tonnes of cargo can be transported on a single flight that has room for up to 78 passengers.

Jambojet charges $2,500 (Sh294,125) and $3,500 (Sh411,775) per tonne, respectively, to transport one tonne of cargo from Nairobi to Goma.

If a $0.1 (Sh11.87) fuel surcharge per kilogramme applies, it means that the carrier will charge customers $2,576 (Sh306,230) per tonne from Nairobi to Goma. It will also charge $3,567 (Sh423,645) to ferry a tonne of cargo from Goma to Nairobi when the fuel surcharge is factored in.

Nairobi-based cargo carrier Astral Aviation also introduced a fuel surcharge of $0.35 (Sh41.5) per kilogramme in April.

“We have a fuel surcharge, which is $0.35 (Sh41.49) per kilogramme which we introduced in April. Unfortunately, I can’t share with you our shipping rates as it’s confidential,” Astral chief executive officer Sanjeev Gadhia told the Business Daily.

Numerous factors, such as decreased refining output and the Russian invasion of Ukraine, which halted the export of crude and refined oil products, have contributed to higher jet fuel prices.

The biggest expense for cargo carriers is jet fuel. Although it is a risky business, airlines have the option of hedging against rising fuel prices.